In case of payment of convertible bonds, the balance of Share Premium - Conversion Privilege account shall be closed to A.Bonds Payable B.Share Premium - Issuance C.Premium or Discount on Bonds Payable D.Gain or loss on extinguishment

In case of payment of convertible bonds, the balance of Share Premium - Conversion Privilege account shall be closed to A.Bonds Payable B.Share Premium - Issuance C.Premium or Discount on Bonds Payable D.Gain or loss on extinguishment

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 5MCQ: The premium on bonds payable account is shown on the balance sheet as A contra asset. A reduction of...

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Question

In case of payment of convertible bonds, the balance of Share Premium - Conversion Privilege account shall be closed to

A.Bonds Payable

B.Share Premium - Issuance

C.Premium or Discount on Bonds Payable

D.Gain or loss on extinguishment

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T or F -Under generally accepted accounting principles, gain or loss must be recognized on the conversion of bonds into equity securities. -A discount on bond payable is charged to interest expense using the effective interest method.
Any unamortized premium should be reported on the balance sheet of the issuing corporation as a. paid-in capital b. a direct deduction from the face amount of the bonds in the Liabilities section c. an addition to the face amount of the bonds in the Liabilities section d. a direct deduction from retained earnings
The balance in Unamortized Premium on Bonds Payable should be O a. reported separately in the Current Liabilities section of the talance sheet. O b. added to the face amount of the related bonds payable on the balance sheet, O C. reported in the Paid-In Capital section of the balance sheet. Od. reported on the balance sheet as a deduction from the face amount of the related bonds payable.
In the balance sheet, the account Discount on Bonds Payable is Group of answer choices added to bonds payable deducted from bonds payable classified as a stockholders equity account classified as an asset
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When the conversion of bonds payable to common stock is recorded under the market value method and the market value of the common stock exceeds the book value of the bonds at date of conversion, the difference is recorded as a debit to Loss on Conversion. debit to Additional Paid-in Capital−Common Stock. debit to Discount on Bonds Payable. debit to Retained Earnings.
Which of the following would NOT be included in the journal entry to show the conversion of bonds payable? O A credit to additional paid in capital O A debit to bonds payable O A debit to bond premium O A credit to gain on conversion
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Bond premium should be reported in the statement of financial position A. at the present value of the future reduction in bond interest expense due to the premium. B. as a direct addition to the face amount of the bonds. C. as a deferred credit. D. along with other premium accounts such as those resulting from share capital transactions.
If a company have a patent and it will not generate probable future economic benefits, in this case the company will: Select one: a. Derecognition. O b. None of the options. c. Not recorded. O d. Record it as an asset