Answered: Premium on Bonds Payable is a(n) a.…

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Premium on Bonds Payable is a(n) a. valuation account b. contra account c. accumulation account d. adjunct account

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 5MCQ: The premium on bonds payable account is shown on the balance sheet as A contra asset. A reduction of...

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Question

7. Premium on Bonds Payable is a(n)

a. valuation account
b. contra account
c. accumulation account
d. adjunct account

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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.
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.
4. What best describes the discount on bonds payable account? a.An asset b.A liability c.An expense d.A contra liability
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
10. The bond interest expense reflected on the income statement should reflect an amount based on the a. effective interest rateb. stated interest ratec. nominal interest rated. face interest rate
The carrying value on bonds equals Bonds Payablea. minus Premium on Bonds Payable.b. plus Discount on Bonds Payable.c. plus Premium on Bonds Payable.d. minus Discount on Bonds Payable.e. both a and bf. both c and d
T or F A discount on bond payable is charged to interest expense using the effective interest method.
The carrying value of Bonds Payable equalsa. Bonds Payable plus Discount on Bonds Payable.b. Bonds Payable minus Discount on Bonds Payable.c. Bonds Payable minus Premium on Bonds Payable.d. Bonds Payable plus Accrued Interest.
When bonds are acquired between interest payment dates, the price paid for the bond is: a. equal to the acquisition cost. b.increased by a charge for accrued interest to the date of purchase. c.decreased by a credit for accrued interest to the date of purchase. d.equal to the par value increased by a charge for accrued interest to the date of purchase.
What is the treatment of transaction costs from issuance to a bond payable measured using the effective interest method? Ignored Added to the initial cost Same as discount Same as premium
Describe the accouting for bonds payaable, including bonds issued at face amount , bonds issued at a discount, and bonds issued at a premium.
Bond issuance costs must be reported separately as deferred charges and charged to expense over the life of the bond issue. t or f?