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1) Were the bonds in the entry on Dec 31. of year 2 redeemed at Maturity? 2) You suspect there is an error in one of the bond redemption entries. Assumimg the the amounts are correct, which entry is questionable? Why? 3) Why do some bonds sell below face value? 4) Which of the following items are ammortized? A. bonds B. Discounts C. Future cash receipts D. Redemption amount F. Contract rate of interest G. It depends on the face value of the bond H. Interest Expense

1) Were the bonds in the entry on Dec 31. of year 2 redeemed at Maturity? 2) You suspect there is an error in one of the bond redemption entries. Assumimg the the amounts are correct, which entry is questionable? Why? 3) Why do some bonds sell below face value? 4) Which of the following items are ammortized? A. bonds B. Discounts C. Future cash receipts D. Redemption amount F. Contract rate of interest G. It depends on the face value of the bond H. Interest Expense

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter22: Corporations: Bonds
Section: Chapter Questions
Problem 10RQ: When bonds are redeemed before maturity, how is the gain or loss on redemption determined? Why does...
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1) Were the bonds in the entry on Dec 31. of year 2 redeemed at Maturity?

2) You suspect there is an error in one of the bond redemption entries. Assumimg the the amounts are correct, which entry is questionable? Why?

3) Why do some bonds sell below face value?

4) Which of the following items are ammortized?

A. bonds

B. Discounts

C. Future cash receipts

D. Redemption amount

F. Contract rate of interest

G. It depends on the face value of the bond

H. Interest Expense

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