The journal entry to record issuing bonds at a discount will include a debit to the Cash account for the following amount: The face value of the bonds O The stated value of the bonds O The maturity value of the bonds The face value of the bonds minus the amount of the discount O The face value of the bonds plus the amount of the discount

The journal entry to record issuing bonds at a discount will include a debit to the Cash account for the following amount: The face value of the bonds O The stated value of the bonds O The maturity value of the bonds The face value of the bonds minus the amount of the discount O The face value of the bonds plus the amount of the discount

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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When bonds are issued at a discount and the effective interest method is used for amortization, at each successive interest payment date, the interest expense: Select one: a. Increases b. Is equal to the change in market value of the bonds c. Decreases d. Is equal to the change in carrying value of the bonds e. Stays the same
The journal entry a company makes for the issuance of bonds when the contract rate is less than the market rate would be Oa. debit Cash and Discount on Bonds Payable, credit Bonds Payable Ob. debit Cash, credit Bonds Payable Oc. debit Cash, credit Premium on Bonds Payable and Bonds Payable Od. debit Bonds Payable, credit Cash
When determining the amount of interest to be paid on a bond, which of the following information is not necessary? a. The length of the interest period, annually or semiannually b. The face rate of interest on the bonds c. The face amount of the bonds d. The selling price of the bonds
Explain the initial & subsequent recognition of interest-bearing long-term notes receivable.
Amortizing the discount and premium on bonds is done in two ways. Describe each one.
A $2,600 credit balance in the Premium on Bonds Payable account represents which of the following? Select one: a. An overpayment for a bond purchase b. An underpayment for a bond purchase c. The current amount of amortization expense d. The unamortized amount of premium earned on a bond issue
b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. Bonds Payable Cash Discount on Bonds Payable Interest Expense Interest Receivable 3. Determine the total interest expense for Year 1. Round to the nearest dollar. 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? 5. Compute the price of $23,854,460 received for the bonds by using Present value at compound interest, and Present value of an annuity. Round to the nearest dollar. Your total may vary slightly from the price given due to rounding differences. Present value of the face amount Present value of the semiannual interest payments Price received for the bonds
For a standard U.S. Treasury bond, when are the following characteristics of the bond determined? The amounts of any interest payments. The dates of any interest payments. The bond's market yield. The bond's market price. The amount that the Treasury returns to the bondholder, when the bond matures. The price that the bondholder pays to the Treasury to acquire the bond. The maturity date. 1. 2. Fixed before the bonds are sold and does not change. Fixed when the bonds are sold and does not change. 3. Fluctuates continually.
Describe the process to record a bond a face value, discount value and premium?
Question Content Area The journal entry a company makes for the issuance of bonds when the contract rate is less than the market rate would be a. debit Cash, credit Premium on Bonds Payable and Bonds Payable b. debit Cash, credit Bonds Payable c. debit Cash and Discount on Bonds Payable, credit Bonds Payable d. debit Bonds Payable, credit Cash
journal entries I need help with I can not understand (a)Record the bond issue (b)Record the first semiannual interest payment. (c)Record the second semiannual interest payment.
Explain the concept of accrued interest on bonds at the end of an accounting period.