FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 22: Long-Term Bonds

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

Corporations with many bondholders will open a separate checking account because

A) it is required by law.
B) the account earns interest.
C) it is easier to do the bookkeeping on the bond interest.
D) it keeps the bond interest records separate for tax purposes.

E) None of the above
F) C) and D)

Correct Answer

verified

Show Answer

Question 32

Essay

Review LaterAdd Note

Review Later

Lee Corporation has 10-year, 12% bonds payable of $100,000 that were sold on January 2, 2019 at a premium of $15,000. The amortization on the premium is recorded at the end of every year. Determine the Balance Sheet presentation of these bonds at December 31, 2021. (Present only the section of the Balance Sheet in which the bonds appear.)

Correct Answer

verified

Show Answer

Question 33

True/False

Review LaterAdd Note

When bonds are issued at a price below face value, the Discount on Bonds Payable account is debited for the difference between the issue price and the face value.

The adjusting entry for Barstow Corporation on September 30, 2019 (the end of the fiscal year)to accrue three months of bond interest due is as follows. Interest is paid on June 30 an December 31. Make the entry to reverse this accrual. Include the proper date for the entry.

Bonds with a face value of $200,000 were issued at 103. The entry to record the issuance will include a credit to the Bonds Payable account for

Compare convertible and callable bonds by listing their characteristics in the following format. Convertible Bonds Callable Bonds

A company has $500,000 in equity and income before interest and taxes of $50,000. The corporate tax rate is 25 percent. If $200,000 of bonds are issued at 10 percent, what is the rate of profit on stockholders' equity?

Match the following definitions with the proper terms.

A bond is----------- if the issuing corporation has the right to require the owner to surrender the bond for payment before the maturity date.

A company issued 6%, 10 year bonds with a par value of $500,000 on April 1. Interest is payable each Sept. 30 and March 31,2019. The journal entry to accrue interest expense as of December 31,2019, is:

Retained Earnings Appropriated for Bond Retirement appears as a separate line item

When bonds are sold at a market price of 105, the cash received for the bonds is 105 percent of the bonds' face value.

On December 31, 2019, a corporation issued $180,000 face value, 8 percent bonds that mature 10 years from the date of issue. The issue price was 98. If the firm uses the straight-line method of amortization, interest expense for 2020 will be reported at

The Bonds Payable account would be credited for $104,000 to record the issuance of $100,000 face value, 10 percent bonds at a market price of 104.

The Discount on Bonds Payable account will have a(n)----------balance.

When a corporation pays the periodic interest payment on its bonds, Bond Interest Expense is debited.

On September 1, 2019, a corporation paid $610,000 to retire bonds with a face value of $600,000 and an unamortized bond discount of $18,000. Record the transaction on page 8 of a general journal. Omit the description.

The IRS requires companies to issue coupon bonds in order to track taxable interest payments made to the bond holders.

What is the early retirement of bonds? There are two ways that the early retirement of bonds can come about? What are they?

On December 31, 2019, a corporation issued $180,000 face value, 8 percent bonds that mature 10 years from the date of issue. The issue price was 104. If the firm uses the straight-line method of amortization, interest expense for 2020 will be reported at