Bonds with a face value of $1,000 were issued for $1,080. Which ONE of the following would be recorded in the books of the issuer of the bonds? O Discount on Bonds Payable of $1,000 Premium on Bonds Payable of $80 O Discount on Bonds Payable of $920 O Premium on Bonds Payable of $1,000 O Premium on Bonds Payable of $920 O Discount on Bonds Payable of $80

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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18
Bonds with a face value of $1,000 were issued for $1,080. Which ONE of the following
would be recorded in the books of the issuer of the bonds?
O Discount on Bonds Payable of $1,000
O Premium on Bonds Payable of $80
O Discount on Bonds Payable of $920
Premium on Bonds Payable of $1,000
O Premium on Bonds Payable of $920
O Discount on Bonds Payable of $80
19
On January 1, the company issued 15-year bonds with a face value of $100,000. The bonds
carry a coupon rate of 8 percent, and interest is paid semi-annually. On the issue date, the market
by companies with simila
interest rate for bonds
kiness was 10 percent compounded
semi-annually. The issuance price
should be reported for_the first six months when the bond issuer makes the FIRST interest
the bonds was $84,628. How much INTEREST EXPENSE
payment on June 30 of Year 1?
O $4,859.40
O $859.40
O $4,000.00
O $231.40
O $4,231.40
20
Tarazi Company issued bonds with a coupon rate of 10% and a face amount of $200,000. The
bonds mature in 15 years. The market interest rate for bonds with the same degree of riskiness is
8% compounded annually. These bonds were issued on January 1 of Year 1 at a price of $234,238.
Coupon payments are made annually on December 31, so the first coupon payment was made on
December 31 of Year 1. How much INTEREST EXPENSE should be reported for_ Year 2?
$18,739
O $1,362
$20,000
O $18,638
O $1,261
Transcribed Image Text:18 Bonds with a face value of $1,000 were issued for $1,080. Which ONE of the following would be recorded in the books of the issuer of the bonds? O Discount on Bonds Payable of $1,000 O Premium on Bonds Payable of $80 O Discount on Bonds Payable of $920 Premium on Bonds Payable of $1,000 O Premium on Bonds Payable of $920 O Discount on Bonds Payable of $80 19 On January 1, the company issued 15-year bonds with a face value of $100,000. The bonds carry a coupon rate of 8 percent, and interest is paid semi-annually. On the issue date, the market by companies with simila interest rate for bonds kiness was 10 percent compounded semi-annually. The issuance price should be reported for_the first six months when the bond issuer makes the FIRST interest the bonds was $84,628. How much INTEREST EXPENSE payment on June 30 of Year 1? O $4,859.40 O $859.40 O $4,000.00 O $231.40 O $4,231.40 20 Tarazi Company issued bonds with a coupon rate of 10% and a face amount of $200,000. The bonds mature in 15 years. The market interest rate for bonds with the same degree of riskiness is 8% compounded annually. These bonds were issued on January 1 of Year 1 at a price of $234,238. Coupon payments are made annually on December 31, so the first coupon payment was made on December 31 of Year 1. How much INTEREST EXPENSE should be reported for_ Year 2? $18,739 O $1,362 $20,000 O $18,638 O $1,261
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