Answered: When retiring bonds before maturity,…

When retiring bonds before maturity, debit Bonds Payable for O the callable amount the bond amount less any discounts or plus any gains. the face value the market value

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter22: Corporations: Bonds

Section: Chapter Questions

Problem 10RQ: When bonds are redeemed before maturity, how is the gain or loss on redemption determined? Why does...

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40. Help me selecting the right answer. Thank you

When retiring bonds before maturity, debit Bonds Payable for
O the callable amount
the bond amount less any discounts or plus any gains.
the face value
the market value

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When bonds are retired at maturity, ________. A. the carrying value always equals the face value B. the carrying value equals the face value plus the unamortized premium or less the unamortized discount C. the bondholders are paid the face value plus the unamortized premium or less the unamortized discount D. the entry to retire the bonds may include a gain or loss on retirement of bonds
What kind of account is the Discount on Bonds Payable? What kind of account is the Premium on Bonds Payable?
When bonds are redeemed before maturity, how is the gain or loss on redemption determined? Why does the calculation differ for bonds issued at face value, at a premium, and at a discount?
The premium on bonds payable account is shown on the balance sheet as A contra asset. A reduction of an expense. An addition to a long-term liability. A subtraction from a long-term liability.
Interest expense on the income statement: A) B) C) D) is net of any bond premium amortization will show the repayment of bond principle should not include bond interest will result in an increase in net income
how Will long term bonds effect current ratio, acid test ratio, and debt to equity ratio? how will purchase inventory effect Current ratio, acid test ratio, debt to equity ratio? how will these effect the ratios mention above: retirement of bonds, sale of common stock, purchase of short-term investment for cash, and decision to refinance on a long term basis some currently maturing debt? ,
The valuation method used for bonds payable is Historical Maturity value Discounted cash-flow valuation at current effective rates Discounted cash-flow valuation at effective rates at issuance
If bonds issue at a premium, what happens to the carrying value of bonds payable and the amount recorded for interest expense over time?
Which of the following does not impact the calculation ofthe cash interest payments to be made to bondholders?a. Face value of the bond.b. Stated interest rate.c. Market interest rate.d. The length of time between payments.
If the straight-line method of amortization of bond premium or discount is used, which of the following statements is true? Group of answer choices Total interest expense will increase over the life of the bonds with the amortization of bond discount. Total interest expense will increase over the life of the bonds with the amortization of bond premium. Total interest expense will decrease over the life of the bonds with the amortization of bond discount. Total interest expense will remain the same over the life of the bonds with the amortization of bond discount.
A debit to Premium on Bonds Payable would least likely be possible on which of the situations? record of interest expense which is lower than the amount paid amortization of a bond premium early retirement of bonds increase in the carrying amount of bonds
What is the excess of the issue price of bonds over their face amount called? premium discount security face