A long-term contract under which a borrower agrees to make payments of interest and principal on specific dates is called a:
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A long-term contract under which a borrower agrees to make payments of interest and principal on specific dates is called a:
Group of answer choices
common stock.
bond.
equity contract.
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- q2 Bonds payable are initially recognized atA. issue price minus transaction costs incurred by the entity.B. issue priceC. issue price plus accrued interestD. face valueq9. Bond premium should be reported in the statement of financial positionA. along with other premium accounts such as those resulting from stock transactions.B. as deferred credit.C. as a direct addition to the face amount of the bonds.D. as a deduction from the face of the bonds.#51 When an investor's accounting period ends on a date that does not coincide with an interest receipt date for bonds held as an investment, the investor must Question 51 options: a make an adjusting entry to debit Interest Receivable and to credit Interest Revenue for the amount of interest accrued since the last interest receipt date. b make an adjusting entry to debit Interest Receivable and to credit Interest Revenue for the total amount of interest to be received at the next interest receipt date. c notify the issuer and request that a special payment be made for the appropriate portion of the interest period. d do nothing special and ignore the fact that the accounting period does not coincide with the bond's interest period.
- Requirement:1. The unamortized adjusted balance of the bond premium account as of December 31, 2020.Interest revenue on bonds is reported Question 24 options: as part of other income as part of operating income as an addition to the Investment in Bonds account as part of comprehensive income but not as part of net incomeQuestion 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
- 5. The premium on bonds payable account is shown on the statement of financial position as a.a contra asset. b.a subtraction from a long-term liability. c.an addition to a long-term liability. d.a reduction of an expense.Majestic Corporation holds an investment in Cromwell bonds that pays interest eachOctober 31. Majestic’s balance sheet at December 31 should reporta. interest expense.b. interest revenue.c. interest payable.d. interest receivable.23.ABC Company acquired bonds for their par value between the date of interest collection. Accrued interest Select one: a. decrease the payment made to the seller. b. They represent an interest income that will be recorded on the date of interest collection. c. they are part of the payment made to the seller. d. they represent an expense in the acquisition of those bonds.
- Enumerate the following; 32. Provides for recognition of an equal amount of premium or discount amortization each period. 33. Bonds that mature in one lump sum at a specified future date. 34. Bonds that provide for conversion into some other security at the option of the stockholder. 35. Bonds that mature in a series of installments at future dates. 36. The difference between the face value and the sales price when bonds are sold below their face value. 37. Bonds for which assets are pledged to guarantee repayment. 38. Obligations that are not expected to be paid in cash within one year or the normal operating cycle. 39. Bonds that do not bear interest but instead are sold at significant discounts providing the investor with a total interest payoff at maturity. 40. Costs incurred by the issuer for legal services, printing and engraving, taxes, and underwriting in connection with the sale of a…Q-k A bond is purchased at a discount and will be accounted for under the amortized cost model. The entry to record the amortization of the discount includes a O debit to the investment account. O debit to Interest Income. O credit to the investment account. O debit to "Gain from Discount."A debtor firm’s 12/31/21 statement of financial position is to be issued of 4/15/22. A long-term obligation contracted in 2019 for settlement on 1/15/22 was extinguished through cash payment on its due date. On 1/20/22, a 5-year note was issued to replace the cash used up for the payment made on 1/15/22. Which of the following statements is correct? Group of answer choices The original obligation should be reported in the 2021 statement of financial position as a current liability because the entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. The new obligation entered into on 1/20/22 should be reported in the 2022 statement of financial position as a non-current liability because it is due to be settled beyond twelve months after the reporting period. The original obligation should be reported in the 2022 statement of financial position as a non-current liability because the entity does have an…
