On January 1 of the current year, the Queen Corporation issued 6% bonds with a face value of $56,000. The bonds are soldfor $54,320. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, fiveyears from now. Queen records straight-line amortization of the bond discount. Determine the bond interest expense for theyear ended December 31.Select the correct answer.$3,696$3,360$280$1,6804:25 PM12/20/2019

Question
Asked Dec 20, 2019
2 views
On January 1 of the current year, the Queen Corporation issued 6% bonds with a face value of $56,000. The bonds are sold
for $54,320. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, five
years from now. Queen records straight-line amortization of the bond discount. Determine the bond interest expense for the
year ended December 31.
Select the correct answer.
$3,696
$3,360
$280
$1,680
4:25 PM
12/20/2019
help_outline

Image Transcriptionclose

On January 1 of the current year, the Queen Corporation issued 6% bonds with a face value of $56,000. The bonds are sold for $54,320. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, five years from now. Queen records straight-line amortization of the bond discount. Determine the bond interest expense for the year ended December 31. Select the correct answer. $3,696 $3,360 $280 $1,680 4:25 PM 12/20/2019

fullscreen
check_circle

Expert Answer

Step 1

Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from investors to raise fund for financing the operations.

Bond interest expense: Bond interest expense is the interest charged by the bondholders at a certain rate of interest.

Step 2

Compute the bonds interest expense for the y...

help_outline

Image Transcriptionclose

Amount Particulars Calculation (S) Discount on bonds payable Annual bond discount amortization Cash interest per annum Interest expense ($56,000-$54,320) (1,680/5) ($56,000x6%) ($336+$3,360) 1,680 336 3,360 3,696

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Accounting

Financial Accounting

Related Accounting Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: The entry to record the issuance of 150 shares of $5 par common stock at par to an attorney in payme...

A: Common stock: These are the ordinary shares that a corporation issues to the investors in order to r...

question_answer

Q: eBay Inc. developed a web-based marketplace at www.ebay.com, in which individuals can buy and sell a...

A: Dividend yield: This is the ratio which measures the amount of dividends paid relative to the market...

question_answer

Q: On January 2, Cohan Company acquired 40% of the outstanding stock of Sanger Company for $500,000. Fo...

A: Equity investments: Equity investments are stock instruments which claim ownership in the investee c...

question_answer

Q: On January 2, Yorkshire Company acquired 40% of the outstanding stock of Fain Company for $600,000. ...

A: Entry to record the purchase of stock.

question_answer

Q: Give examples of two cost objects in companies using job costing.

A: Job costing:

question_answer

Q: Describe FOB shipping point and FOB destination. When does the buyer take ownership of the goods, an...

A: Transportation Costs: The costs of delivering the merchandise inventory from the manufacturer to the...

question_answer

Q: Bocelli Co. purchased $120,000 of 6%, 20-year Sanz County bonds on May 11, Year 1, directly from the...

A: Bond investment: Bond investments are debt securities which pay a fixed interest revenue to the inve...

question_answer

Q: After the accounts are closed on February 3, prior to liquidating the partnership, the capital accou...

A: 1) The statement of partnership liquidation of G, C and J is as follows: 

question_answer

Q: Willow Creek Nursery, with an authorization of 75,000 shares of preferred stock and 200,000 shares o...

A: Common stock: These are the ordinary shares that a corporation issues to the investors in order to r...