Answered: On October 1, 2002, Westridge Inc.…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 6PB: Edward Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...

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30.

On October 1, 2002, Westridge Inc. issued, at 101 plus accrued interest, 800 of its 10 percent, $1,000 bonds. The bonds are dated July 1, 2002, and mature on July 1, 2012. Interest is payable semiannually on January 1 and July 1. At the time of issuance, Westridge would receive cash of

a.	$800,000.
b.	$808,000.
c.	$820,000.
d.	$828,000.

31.

On January 1, 2002, Matlock Inc. issued its 10 percent bonds in the face amount of $1,500,000. They mature on January 1, 2012. The bonds were issued for $1,329,000 to yield 12 percent, resulting in bond discount of $171,000. Matlock uses the effective-interest method of amortizing bond discount. Interest is payable July 1 and January 1. For the six months ended June 30, 2002, Matlock should report bond interest expense of

a.	$75,000.
b.	$79,740.
c.	$83,550.
d.	$85,260.

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