Business, 05.05.2020 17:21 brittanyfox411
Bee Company issued 5-year, 7% bonds with a par value of $95,000. The company received $92,947 for the bonds. Using the straight-line method to amortize the discount, the amount of interest expense for the first semiannual interest period is: $6,650.00. $7,060.60. $3,530.30. $3,119.70. $3,325.00.
On January 1, a company issues bonds dated January 1 with a par value of $200,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 6% and the bonds are sold for $208,531. The journal entry to record the issuance of the bond is:
Debit Cash $208,531; credit Discount on Bonds Payable $8,531; credit Bonds Payable $200,000.
Debit Bonds Payable $200,000; debit Bond Interest Expense $8,531; credit Cash $208,531.
Debit Cash $208,531; credit Bonds Payable $208,531.
Debit Cash $200,000; debit Premium on Bonds Payable $8,531; credit Bonds Payable $208,531.
Debit Cash $208,531; credit Premium on Bonds Payable $8,531; credit Bonds Payable $200,000.
On January 1, a company issues bonds dated January 1 with a par value of $270,000. The bonds mature in 5 years. The contract rate is 11%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $280,420. The journal entry to record the first interest payment using straight-line amortization is:
Debit Bond Interest Expense $15,892.00; credit Premium on Bonds Payable $1,042.00; credit Cash $14,850.00.
Debit Interest Payable $14,850.00; credit Cash $14,850.00.
Debit Bond Interest Expense $15,892.00; credit Discount on Bonds Payable $1,042.00; credit Cash $14,850.00.
Debit Bond Interest Expense $13,808.00; debit Premium on Bonds Payable $1,042.00; credit Cash $14,850.00.
Debit Bond Interest Expense $13,808.00; debit Discount on Bonds Payable $1,042.00; credit Cash $14,850.00.
Answers: 3
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Bee Company issued 5-year, 7% bonds with a par value of $95,000. The company received $92,947 for th...
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