Reference no: EM132597403

Question 1: A $293,000 bond was redeemed at 98 when the carrying value of the bond was $285,675. The entry to record the redemption would include a

a. gain on bond redemption of $5,860.

b. loss on bond redemption of $1,465.

c. gain on bond redemption of $1,465.

d. loss on bond redemption of $7,325

Question 2: On January 1, $810,000, five-year, 10% bonds, were issued for $785,700. Interest is paid semiannually on January 1 and July 1. If the issuing corporation uses the straight-line method to amortize the discount on bonds payable, the semiannual amortization amount is

a. $24,300

b. $2,430

c. $40,500

d. $4,860

Question 3: On January 1 of the current year, Barton Corporation issued 10% bonds with a face value of $102,000. The bonds are sold for $96,900. The bonds pay interest semiannually on June 30 and December 31, and the maturity date is December 31, five years from now. Barton records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 is

a. $11,220

b. $510

c. $5,100

d. $11,730

Question 4: The present value of $57,000 to be received in one year, at 6% compounded annually, is (rounded to nearest dollar) _______

a. $53,774

b. $50,893

c. $57,000

d. $53,271

Question 5: Bonds Payable has a balance of $914,000 and Premium on Bonds Payable has a balance of $10,054. If the issuing corporation redeems the bonds at 103, what is the amount of gain or loss on redemption?

a. $10,054 loss

b. $941,420 gain

c. $17,366 loss

d. $10,054 gain