Gains on the redemption of bonds are reported in the Other Revenue section of the income statement. O Tre O False
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- The premium on bonds payable account is shown on the balance sheet as A contra asset. A reduction of an expense. An addition to a long-term liability. A subtraction from a long-term liability.What best describes the discount on bonds payable account? A liability An asset A contra liability An expenseDebt issuance costs are: Accounted for as a deduction from the equity balance on the balance sheet Recognized initially as a current liability on the balance sheet Amortized over the term of the related debt liability Expensed on the income statement when the transaction occurs Which one is the correct answer please?
- The Discount on Bonds Payable accounta. is an expense account.b. is a contra account to Bonds Payable.c. is expensed at the bond’s maturity.d. is a miscellaneous revenue account.In the balance sheet, the account Discount on Bonds Payable is Group of answer choices added to bonds payable deducted from bonds payable classified as a stockholders equity account classified as an assetThe following items are found in the financial statements.Indicate how each of these items should be classified in the financial statements. Classification (a) Discount on bonds payable. select a financial statement Balance SheetIncome statement (b) Interest expense (credit balance). select a financial statement Balance SheetIncome statement (c) Unamortized bond issue costs. select a financial statement Balance SheetIncome statement (d) Gain on repurchase of debt. select a financial statement Balance SheetIncome statement (e) Mortgage payable (payable in equal amounts over next 3 years). select a financial statement Balance SheetIncome statement…
- Interest revenue on bonds is reported as Group of answer choices an addition to the investment in bonds account part of comprehensive income but not as part of net income part of Other Revenue (Loss) part of income from operationsWhen bonds and other debt securities are issued, payments such as legal costs, printing costs, and underwriting fees, are referred to as debt issuance costs (called transaction costs under IFRS). If Rushing International prepares its financial statements using IFRS: a. the recorded amount of the debt is increased by the transaction costs. b. the decrease in the effective interest rate caused by the transaction costs is reflected in the interest expense. c. the transaction costs are recorded separately as an asset. d. the increase in the effective interest rate caused by the transaction costs is reflected in the interest expense.On the balance sheet, the account Premium on Bonds Payable is: Select one: a. Added to Bonds Payable b. Added to Bond Interest Expense c. Deducted from Bond Interest Expense d. Deducted from Bonds Payable
- Under IFRS, bond issuance costs, including the printing costs and legal fees associated with the issuance, should be:(a) expensed in the period when the debt is issued.(b) recorded as a reduction in the carrying value of bonds payable.(c) accumulated in a deferred charge account and amortized over the life of the bonds.(d) reported as an expense in the period the bonds mature or are redeemed.Any unamortized premium should be reported on the balance sheet of the issuing corporation as a. paid-in capital b. a direct deduction from the face amount of the bonds in the Liabilities section c. an addition to the face amount of the bonds in the Liabilities section d. a direct deduction from retained earningsT or F -Under generally accepted accounting principles, gain or loss must be recognized on the conversion of bonds into equity securities. -A discount on bond payable is charged to interest expense using the effective interest method.
