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Bonds with a face value of $1,000 were issued for $1,080. Which ONE of the following would be recorded in the books of the issuer of the bonds? O Discount on Bonds Payable of $1,000 Premium on Bonds Payable of $80 O Discount on Bonds Payable of $920 O Premium on Bonds Payable of $1,000 O Premium on Bonds Payable of $920 O Discount on Bonds Payable of $80

Bonds with a face value of $1,000 were issued for $1,080. Which ONE of the following would be recorded in the books of the issuer of the bonds? O Discount on Bonds Payable of $1,000 Premium on Bonds Payable of $80 O Discount on Bonds Payable of $920 O Premium on Bonds Payable of $1,000 O Premium on Bonds Payable of $920 O Discount on Bonds Payable of $80

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 15MCQ
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18 Bonds with a face value of $1,000 were issued for $1,080. Which ONE of the following would be recorded in the books of the issuer of the bonds? O Discount on Bonds Payable of $1,000 O Premium on Bonds Payable of $80 O Discount on Bonds Payable of $920 Premium on Bonds Payable of $1,000 O Premium on Bonds Payable of $920 O Discount on Bonds Payable of $80 19 On January 1, the company issued 15-year bonds with a face value of $100,000. The bonds carry a coupon rate of 8 percent, and interest is paid semi-annually. On the issue date, the market by companies with simila interest rate for bonds kiness was 10 percent compounded semi-annually. The issuance price should be reported for_the first six months when the bond issuer makes the FIRST interest the bonds was $84,628. How much INTEREST EXPENSE payment on June 30 of Year 1? O $4,859.40 O $859.40 O $4,000.00 O $231.40 O $4,231.40 20 Tarazi Company issued bonds with a coupon rate of 10% and a face amount of $200,000. The bonds mature in 15 years. The market interest rate for bonds with the same degree of riskiness is 8% compounded annually. These bonds were issued on January 1 of Year 1 at a price of $234,238. Coupon payments are made annually on December 31, so the first coupon payment was made on December 31 of Year 1. How much INTEREST EXPENSE should be reported for_ Year 2? $18,739 O $1,362 $20,000 O $18,638 O $1,261
Transcribed Image Text:18 Bonds with a face value of $1,000 were issued for $1,080. Which ONE of the following would be recorded in the books of the issuer of the bonds? O Discount on Bonds Payable of $1,000 O Premium on Bonds Payable of $80 O Discount on Bonds Payable of $920 Premium on Bonds Payable of $1,000 O Premium on Bonds Payable of $920 O Discount on Bonds Payable of $80 19 On January 1, the company issued 15-year bonds with a face value of $100,000. The bonds carry a coupon rate of 8 percent, and interest is paid semi-annually. On the issue date, the market by companies with simila interest rate for bonds kiness was 10 percent compounded semi-annually. The issuance price should be reported for_the first six months when the bond issuer makes the FIRST interest the bonds was $84,628. How much INTEREST EXPENSE payment on June 30 of Year 1? O $4,859.40 O $859.40 O $4,000.00 O $231.40 O $4,231.40 20 Tarazi Company issued bonds with a coupon rate of 10% and a face amount of $200,000. The bonds mature in 15 years. The market interest rate for bonds with the same degree of riskiness is 8% compounded annually. These bonds were issued on January 1 of Year 1 at a price of $234,238. Coupon payments are made annually on December 31, so the first coupon payment was made on December 31 of Year 1. How much INTEREST EXPENSE should be reported for_ Year 2? $18,739 O $1,362 $20,000 O $18,638 O $1,261
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