9. Which of the following is FALSE when redeeming a bond between semi-annual interest payment dates?O Record a gain on redemption if the cash paid is more than the carrying amount of the bonds.O Record the cash paid.O Eliminate the carrying amount of the bonds.O Record the amortization of any premium or discount.

Bonds are typically issued at face value, which is the amount that the bondholder will receive when…

Answered: Which of the following is FALSE when…

Business

Accounting

Which of the following is FALSE when redeeming a bond between semi-annual interest payment dates?

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter22: Corporations: Bonds

Section: Chapter Questions

Problem 10RQ: When bonds are redeemed before maturity, how is the gain or loss on redemption determined? Why does...

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Question

Which of the following is FALSE when redeeming a bond between semi-annual interest payment dates?
O Record a gain on redemption if the cash paid is more than the carrying amount of the bonds.
O Record the cash paid.
O Eliminate the carrying amount of the bonds.
O Record the amortization of any premium or discount.

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When bonds are redeemed before maturity, how is the gain or loss on redemption determined? Why does the calculation differ for bonds issued at face value, at a premium, and at a discount?
When a bond sells at a discount, the carrying value ________ after each amortization entry. A. increases B. decreases C. stays the same D. cannot be determined
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.
1) Were the bonds in the entry on Dec 31. of year 2 redeemed at Maturity? 2) You suspect there is an error in one of the bond redemption entries. Assumimg the the amounts are correct, which entry is questionable? Why? 3) Why do some bonds sell below face value? 4) Which of the following items are ammortized? A. bonds B. Discounts C. Future cash receipts D. Redemption amount F. Contract rate of interest G. It depends on the face value of the bond H. Interest Expense
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When the effective-interest method is used, the amount of bond discount amortized eachinterest period is equal to thea. amount of interest expense less the cash paid for interest.b. amount of interest expense plus the cash paid for interest.c. face value of the bond times the market interest rate at the date of issue.d. face value of the bond times the stated interest rate.
Which of the following statements relating to bonds is incorrect? a. A bond is a debt instrument giving the issuer flexibility as to maturity date. b. None of the choices c. A bond’s face value is the amount the issuer must pay to the bondholder at maturity d. The owner of a registered bond is the person to whom interest payments are mailed. e. A bond will typically sell at a discount when its nominal rate is less than the current market rate of interest
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