Question 6 (i) On 1 April, year 1, Happy Corporation issues $50 million of 10%, 30-year bonds payable at par. Interest on the bonds is payable semiannually each 1 April and 1 October. The journal entry to record the first cash payment to bondholders on 1 October, year 1, will include: A: A credit to Cash of $5,000,000. B: A credit to Interest Payable of $2,500,000. C: A debit to Bonds Payable of $5,000,000. D: A debit to Interest Expense of $2,500,000. (ii) ABC Manufacturing Company sold a vehicle for cash of $70,000 with a loss of $10,000 recognized. The accumulated depreciation amounted to $140,000. The original cost of the asset must have been: A: $130,000. B: $150,000. C: $200,000. D: $220,000.
Question 6
(i) On 1 April, year 1, Happy Corporation issues $50 million of 10%, 30-year bonds payable at par. Interest on the bonds is payable semiannually each 1 April and 1 October.
The
A: A credit to Cash of $5,000,000.
B: A credit to Interest Payable of $2,500,000.
C: A debit to Bonds Payable of $5,000,000.
D: A debit to Interest Expense of $2,500,000.
(ii) ABC Manufacturing Company sold a vehicle for cash of $70,000 with a loss of $10,000 recognized. The
A: $130,000.
B: $150,000.
C: $200,000.
D: $220,000.
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