Reference no: EM132883236

Questions -

Q1. X corporation retire its 100,000 face value bonds at 105 on January 1, following the payment of interest. The carrying value of the bonds at the redemption date is 103,745. The entry to record the redemption will include a

A. credit of 3,745 to loss on extinguishment of debt

B. debit of 103,745 to bonds payable

C. debit of 3,745 to bonds payable

D. credit of 1,255 to gain on extinguishment of debt

Q2. On January 1, 2015, X issued its 10% bonds in the face amount of 3,000,000 which mature on January 1, 2020. The bonds were issued for 3,405,000 to yield 8% resulting in bond premium. Interest is payable annually on December 31. At December 31 2015 the carrying value of the bonds should be

A. 3,405,000

B. 3,377,400

C. 3,364,500

D. 3,304,500

Q3. The adjusted trial balance for Y Company at the end of the current year 2020 contained the following accounts : 5-year bonds payable 1,600,000 , Bond interest payable 50,000, Notes payable (3 mos) 40,000, Notes payable (5 yr.) 165,000 , Mortgage payable (15,000 due currently) 200,000 , Salaries and wage payable 18,000, Taxes payable (due 3/15 of 2021) 25,000. The total non-current liabilities reported on the statement of financial position are

A. 1,965,000

B. 1,850,000

C. 1,950,000

D. 1,865,000

Q4. On January 1, 2020 , WTF Company received a 1,077,200 for 12% bonds with face amount of 1,000,000. The bonds were sold to yield 10% . Interest is payable semi annually every January 1 and July 1. The entity has elected the fair value option for measuring the financial liability. On December 31, 2020 the fair market value of the bonds is determined to be 1,064,600 due to market and interest factor. What amount should be reported as gain or loss from change in fair value of the bonds to be reflected in OCI for 2020?

A. 64,600 gain

B. 12,600 gain

C. 12,600 loss

D. zero