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What is the amount of interest cullumber must pay

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Reference no: EM132792642

Problem 1: Five thousand bonds with a face value of $1000 each, are sold at 113. The entry to record the issuance is

A. Cash $5000000
Premium on Bonds Payable $650000
Bonds Payable $5650000

B. Cash $5650000
Premium on Bonds Payable $650000
Bonds Payable $5000000

C. Cash $5650000
Bonds Payable$5650000

D. Cash $5650000
Discount on Bonds Payable $650000
Bonds Payable $5000000

Problem 2: Cullumber Company received proceeds of $483000 on 10-year, 8% bonds issued on January 1, 2019. The bonds had a face value of $512000, pay interest annually on December 31, and have a call price of 103. Cullumber uses the straight-line method of amortization. What is the amount of interest Cullumber must pay the bondholders in 2019?

A. $43860
B. $38060
C. $40960
D. $38640

Reference no: EM132792642

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