On the maturity date of bonds issued at a premium: A) the Premium on Bonds Payable...
On the maturity date of bonds issued at a premium:
A) the Premium on Bonds Payable account is zero
B) the carrying value of the bonds is greater than face value
C) the carrying value of the bonds is less than face value
D) both a and b are correct
Homework Answers
Premium on bonds payable is amortised over the useful life of the bonds and becomes zero at the time of maturity.
Option A
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On the maturity date of bonds issued at a premium: A) the Premium on Bonds Payable...
36. If bonds are issued initially at a premium and the effective-interest method of amortization is...
36. If bonds are issued initially at a premium and the effective-interest method of amortization is used, interest expense in the earlier years will be A) greater than if the straight-line method were used. B) greater than the amount of the interest payments. C) the same as if the straight-line method were used. D) less than if the straight-line method were used. 37. Stockholders' equity is generally classified into two major categories: A) contributed capital and appropriated capital. B) appropriated...
C) increase if bonds are issued at par D) increase if bonds are issued at a...
C) increase if bonds are issued at par D) increase if bonds are issued at a discount 10) Current liabilities fall into two categories, which are referred to as: A) contra liabilities and contingent liabilities B) contingent liabilities and non contingent liabilities C) liabilities of a known amount and liabilities whose amount must be estimated D) liabilities of a known amount and contingent liabilities 11) Bonds with a face value of $100,000 were sold at an effective rate of 10%...
Present Value of Bonds Payable; Premium Moss Co. issued $610,000 of five-year, 13% bonds, with interest...
Present Value of Bonds Payable; Premium Moss Co. issued $610,000 of five-year, 13% bonds, with interest payable semiannually, at a market (effective) interest rate of 12%. Determine the present value of the bonds payable, using the present value tables in Exhibit 5 and Exhibit 7. Round to the nearest dollar. $ 632,442 X Feedback Check My Work Remember, the selling price of a bond is the sum of the present values of: the face amount of the bonds due at...
9) Under the effective-interest method of amortization, the cash payment on each interest pas date will:...
9) Under the effective-interest method of amortization, the cash payment on each interest pas date will: A) remain the same for each interest period B) decrease if bonds are issued at a premium C) increase if bonds are issued at par D) increase if bonds are issued at a discount 10) Current liabilities fall into two categories, which are referred to as: A) contra liabilities and contingent liabilities B) contingent liabilities and non contingent liabilities C) liabilities of a known...
On 1 January 2019, Oscar Ltd issued 10-year bonds with a face amount of $20,000,000 and a contract rate of 8%, with int...
On 1 January 2019, Oscar Ltd issued 10-year bonds with a face amount of $20,000,000 and a contract rate of 8%, with interest payable annually starting 1 January 2020. The effective interest rate on the date of issuance was 10%. Required: a) Prepare the journal entry for the bond issuance, and explain why the bonds will be issued at less than face value. b) Oscar Ltd has an annual accounting period ending on 31 March 2019 Prepare the adjusting entry...
n stock is issued for an amount greater than par value 8. should be credited to...
n stock is issued for an amount greater than par value 8. should be credited to a. Retained Earnings b. Cash c. Legal Capital d. Paid-in Capital in Excess of Par e. Unrealized Holding Gains and Losses-Equity to record the amortization of a premium on bonds payable is a. Premium on Bonds Payable b. Interest Expense c. Interest Expense d. Bonds Payable e. Premium on Bonds Payable Interest Expense Premium on Bonds Payable Cash Interest Expense Interest Payable Acorp ration...
Cullumber Company issued $456,000, 6%, 30-year bonds on January 1, 2022, at 105. Interest is payable...
Cullumber Company issued $456,000, 6%, 30-year bonds on January 1, 2022, at 105. Interest is payable annually on January 1. Cullumber uses straight-line amortization for bond premium or discount. Prepare the journal entries to record the following events. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The accrual of interest and the premium amortization on December 31, 2022. (c) The payment of interest on January 1, 2023....
Date of bonds: January 1, 2018 Maturity amount and date: $290,000 due in 10 years (December...
Date of bonds: January 1, 2018 Maturity amount and date: $290,000 due in 10 years (December 31, 2027) Interest: 9.0 percent per year payable each December 31 Date issued: January 1, 2018 Required: For each of the three independent cases that follow, provide the following amounts to be reported on the January 1, 2018, financial statements immediately after the bonds were issued: (Deductions should be indicated by a minus sign.) January 1, 2018—Financial Statements: Case A (issued at 100) Case...
Sikes Corporation, whose annual accounting period ends on December 31, issued the following bonds: Date of bonds: Janua...
Sikes Corporation, whose annual accounting period ends on December 31, issued the following bonds: Date of bonds: January 1, 2018 Maturity amount and date: $150,000 due in 10 years (December 31, 2027) Interest: 10 percent per year payable each December 31 Date issued: January 1, 2018 Required: 1. For each of the three independent cases that follow, provide the amounts to be reported on the January 1, 2018, financial statements immediately after the bonds are issued. TIP: See Exhibit 10.5...
On 1 January 2019, Oscar Ltd issued 10-year bonds with a face amount of $20,000,000 and a contract rate of 8%, with inte...
On 1 January 2019, Oscar Ltd issued 10-year bonds with a face amount of $20,000,000 and a contract rate of 8%, with interest payable annually starting 1 January 2020. The effective interest rate on the date of issuance was 10%. Required: a) Prepare the journal entry for the bond issuance, and explain why the bonds will be issued at less than face value. b) Oscar Ltd has an annual accounting period ending on 31 March 2019. Prepare the adjusting entry...
36. If bonds are issued initially at a premium and the effective-interest method of amortization is used, interest expense in the earlier years will be A) greater than if the straight-line method were used. B) greater than the amount of the interest payments. C) the same as if the straight-line method were used. D) less than if the straight-line method were used. 37. Stockholders' equity is generally classified into two major categories: A) contributed capital and appropriated capital. B) appropriated...
C) increase if bonds are issued at par D) increase if bonds are issued at a discount 10) Current liabilities fall into two categories, which are referred to as: A) contra liabilities and contingent liabilities B) contingent liabilities and non contingent liabilities C) liabilities of a known amount and liabilities whose amount must be estimated D) liabilities of a known amount and contingent liabilities 11) Bonds with a face value of $100,000 were sold at an effective rate of 10%...
Present Value of Bonds Payable; Premium Moss Co. issued $610,000 of five-year, 13% bonds, with interest payable semiannually, at a market (effective) interest rate of 12%. Determine the present value of the bonds payable, using the present value tables in Exhibit 5 and Exhibit 7. Round to the nearest dollar. $ 632,442 X Feedback Check My Work Remember, the selling price of a bond is the sum of the present values of: the face amount of the bonds due at...
9) Under the effective-interest method of amortization, the cash payment on each interest pas date will: A) remain the same for each interest period B) decrease if bonds are issued at a premium C) increase if bonds are issued at par D) increase if bonds are issued at a discount 10) Current liabilities fall into two categories, which are referred to as: A) contra liabilities and contingent liabilities B) contingent liabilities and non contingent liabilities C) liabilities of a known...
On 1 January 2019, Oscar Ltd issued 10-year bonds with a face amount of $20,000,000 and a contract rate of 8%, with interest payable annually starting 1 January 2020. The effective interest rate on the date of issuance was 10%. Required: a) Prepare the journal entry for the bond issuance, and explain why the bonds will be issued at less than face value. b) Oscar Ltd has an annual accounting period ending on 31 March 2019 Prepare the adjusting entry...
n stock is issued for an amount greater than par value 8. should be credited to a. Retained Earnings b. Cash c. Legal Capital d. Paid-in Capital in Excess of Par e. Unrealized Holding Gains and Losses-Equity to record the amortization of a premium on bonds payable is a. Premium on Bonds Payable b. Interest Expense c. Interest Expense d. Bonds Payable e. Premium on Bonds Payable Interest Expense Premium on Bonds Payable Cash Interest Expense Interest Payable Acorp ration...
Cullumber Company issued $456,000, 6%, 30-year bonds on January 1, 2022, at 105. Interest is payable annually on January 1. Cullumber uses straight-line amortization for bond premium or discount. Prepare the journal entries to record the following events. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The accrual of interest and the premium amortization on December 31, 2022. (c) The payment of interest on January 1, 2023....
Sikes Corporation, whose annual accounting period ends on December 31, issued the following bonds: Date of bonds: January 1, 2018 Maturity amount and date: $150,000 due in 10 years (December 31, 2027) Interest: 10 percent per year payable each December 31 Date issued: January 1, 2018 Required: 1. For each of the three independent cases that follow, provide the amounts to be reported on the January 1, 2018, financial statements immediately after the bonds are issued. TIP: See Exhibit 10.5...
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