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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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
Transcribed Image Text:A e NI
Ye ll 36% O 14:24
LTE
Question 6/10
On 6/30/12, a company recorded a journal
entry for the coupon payment on its bond.
As part of the journal entry, the company
debited bonds payable. Which of the
following is true regarding this journal entry?
(check all that apply)
The company debited Interest
Expense
The proceeds of the bond were less
than the face value
The company credited Cash
The bond was issued at a discount
The coupon rate is greater than the
effective rate
NEXT
Expert Solution
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- Bonds Payable has a balance of $1,091,000 and Discount on Bonds Payable has a balance of $13,092. If the issuing corporation redeems the bonds at 98, what is the amount of gain or loss on redemption?arrow_forwardMedhurst Corporation issued $89,000 in bonds for $86,000. The bonds had a stated rate of 8% and pay interest quarterly. What is the journal entry to record the first interest payment? If an amount box does not require an entry, leave it blank.arrow_forwardAccounting Bonds Payable has a balance of $957,000 and Discount on Bonds Payable has a balance of $9,570. If the issuing corporation redeems the bonds at 97.5, what is the amount of gain or loss on redemption? a. $14,355 loss b. $9,570 gain c. $14,355 gain d. $9,570 lossarrow_forward
- On December 31, a $1,600,000 bond issue on which there is an unamortized discount of $70,500 is redeemed for $1,554,100. Required: Journalize the redemption of the bonds. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.arrow_forwardBonds that are made payable to whoever holds them; also called unregistered bonds. The contract between the bond issuer and the bondholder; it identifies the rights and obligations of the parties. Bonds that mature at different dates with the result that the entire debt is repaid gradually over a number of years. An obligation requiring a series of periodic payments to the lender. 1. Installment Note 2. Coupon Bonds Bonds that have interest coupons attached to their certificates; the bondholders detach the coupons when they mature and present them to a bank or broker for 3. Market Rate 4. Bond Indenture 5. Convertible Bonds collection. 6. Bearer Bonds Bonds that can be exchanged by the bondholders for a fixed 7. Term Bonds number of shares of the issuing corporation's common stock. 8. Unsecured Bonds 9. Serial Bonds An accounting protocol that allocates interest 10. Effective Interest Rate Method expense over the life of the bonds in a way that yields a constant rate of interest. The…arrow_forwardDid Delta have to disclose the market value of bonds in financial statements? a. No b. Yes, in footnotes c. Yes, in footnotes and on the face balance sheet d. Yes, but only if they can compute a market value.arrow_forward
- Blue Corporation issued 2,100 $1,000 bonds at 103. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling in the market at 98, and the warrants had a market price of $41.Use the proportional method to record the issuance of the bonds and warrants. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round your answers to 0 decimal places, e.g. 5,125.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amountarrow_forwardJohansen Company issued a bond at a discount. Which of the following shows how the issuance of the bonds affects the financial statements? Balance Sheet A. C. D. Assets = Liabilities + Multiple Choice O O OO Option A Option C Option B Option D Stockholders' Equity n/a n/a n/a Revenue n/a n/a n/a n/a Income Statement Expense + n/a + n/a = Net Income Statement of Cash Flows +OA +FA +FA +OA n/a n/aarrow_forwardHaresharrow_forward
- Please see below. Need help with this.arrow_forwardSunland Corporation issued 1,800 $1,000 bonds at 101. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling separately at 98. The market price of the warrants without the bonds cannot be determined. Use the incremental method to record the issuance of the bords and warrants. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Creditarrow_forward
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