Exam 20: Corporations and Bonds Payable

A bond that has a face value of $250,000 with an annual interest rate of 9% paid semiannually and sold at par would have an interest payment of ________ semiannually.

Using the following accounts: [1]Cash [2]Sinking fund [3]Equipment [4]Building [5]Land [6]Accounts payable [7]Notes payable [8]Bond payable [9]Bond interest expense payable [10]Premium on bonds payable [11]Discount on bonds payable [12]Common stock [13]Retained earnings [14]Sinking fund earned [15]Bond interest expense [16]Gain on retirement [17]Loss on retirement Indicate the account(s) to be debited and credited to record the following transactions. -Issued bonds at face value in exchange for buildings and land. Debit ________ & ________ & ________ Credit ________ & ________ & ________

Davis Corporation sells $100,000,12%,10-year bonds for 103 on January 1.Compute the semi-annual interest expense recorded on July 1 using the interest method.The market rate is 8%.

The information on the bond certificate written by the corporation in a formal agreement is called:

A bond issue of $500,000 sold at 107 has a bond premium of $35,000.

When making the adjustment for accrued interest,the Bond Premium account was not taken into account.This error would cause:

Carrying value is the same thing as:

Assume the following account balances immediately after an interest payment date: Bonds Payable \ 100,000 Premium on Bonds Payable 5,000 If the bonds are retired immediately at a total cost of $104,000,the journal entry to record this event is:

Using the straight-line method,the semiannual interest expense of a 12%,$300,000 bond for 15 years at 102 would be:

On January 1,Auctions Online issued $300,000,9%,10-year bonds to lenders at the contract rate.Interest is to be paid semiannually on July 1 and January 1.Journalize the following entries: a.Issued the bonds. b.Paid first semiannual interest payment. c.Retired the bonds at maturity.

On April 1,20XX,Jones Company issued $200,000,10-year,6% bonds with semiannual interest payments on June 30 and December 31.Record the 20XX journal entries.

The corporation will repay the principal amount of the bond on the maturity date.

Interest expense will be greater than the interest payment when bonds are issued at:

Discount on Bonds Payable is a:

The entry to record the issuance of a bond between interest payment dates will include a:

Which of the following statements is true?

For a corporation,bond interest:

Allan Corporation issued 300,8%,10-year,$1,000 bonds on July 1.The annual bond interest date is June 30,and the bonds were issued at face value.The amount of interest expense reported for the current year is:

When bonds are retired,the Bonds Payable account is credited for face value even if the bonds were originally sold at a premium.

Island Corporation issued $500,000 of 6%,10-year bonds at 104 on May 1,2009.Interest is paid semi-annually on October 31 and April 30.Journalize the entries for the issuance of the bond on May 1,the first interest payment on October 31 using straight-line method,and the adjusting entry on December 31.