As the bond discount is amortized, the carrying value of the bonds will increase.TrueFalseAs the bond premium is amortized, the carrying value of the bonds will decrease.TrueFalseWhen bonds that were initially issued at a discount are redeemed at maturity, thejournal entry requires a) debit to Bonds Payable, debit to Discount on Bonds Payable, and a credit toCash) debit to Bonds Payable, credit to Discount on Bonds Payable, and a credit toCashO debit to Cash, credit to Bonds Payable and a credit to Discount on BondsPayable) debit to Bonds Payable and a credit to CashWhen bonds that were initially issued at a premium are redeemed at maturity, thejournal entry requires a) debit to Bonds Payable and a credit to CashO debit to Bonds Payable, credit to Premium on Bonds Payable, and a credit toCashO debit to Bonds Payable, debit to Premium on Bonds Payable, and a credit toCashO debit to Cash, credit to Bonds Payable and a credit to Premium on BondsPayableWhen bonds that were initially issued at a premium are redeemed prior to maturity,the journal entry requires aO debit to Cash, credit to Bonds Payable and a credit to Premium on BondsPayable, plus the recognition of any gain or lossdebit to Bonds Payable, debit to Premium on Bonds Payable, and a credit toCash, plus the recognition of any gain or lossdebit to Bonds Payable and a credit to CashO debit to Bonds Payable, credit to Premium on Bonds Payable, and a credit toCash, plus the recognition of any gain or loss

Answered: As the bond discount is amortized, the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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As the bond discount is amortized, the carrying value of the bonds will increase.
True
False
As the bond premium is amortized, the carrying value of the bonds will decrease.
True
False
When bonds that were initially issued at a discount are redeemed at maturity, the
journal entry requires a
) debit to Bonds Payable, debit to Discount on Bonds Payable, and a credit to
Cash
) debit to Bonds Payable, credit to Discount on Bonds Payable, and a credit to
Cash
O debit to Cash, credit to Bonds Payable and a credit to Discount on Bonds
Payable
) debit to Bonds Payable and a credit to Cash
When bonds that were initially issued at a premium are redeemed at maturity, the
journal entry requires a
) debit to Bonds Payable and a credit to Cash
O debit to Bonds Payable, credit to Premium on Bonds Payable, and a credit to
Cash
O debit to Bonds Payable, debit to Premium on Bonds Payable, and a credit to
Cash
O debit to Cash, credit to Bonds Payable and a credit to Premium on Bonds
Payable
When bonds that were initially issued at a premium are redeemed prior to maturity,
the journal entry requires a
O debit to Cash, credit to Bonds Payable and a credit to Premium on Bonds
Payable, plus the recognition of any gain or loss
debit to Bonds Payable, debit to Premium on Bonds Payable, and a credit to
Cash, plus the recognition of any gain or loss
debit to Bonds Payable and a credit to Cash
O debit to Bonds Payable, credit to Premium on Bonds Payable, and a credit to
Cash, plus the recognition of any gain or loss

Expert Solution

Bonds

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Bonds payable is a long-term liability in which the bonds has been issued instead of amount borrowed with the contractual obligation of paying the interest semi-annually or annually till the date of maturity. It is issued by the corporates, governments to general public to secure debts.

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