Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Question
Chapter 14, Problem 7MC
To determine
Identify the option that should be recognized separately if excess of cash is paid over the carrying amount of the bonds, during the call provision to retire bonds.
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If the sale of bonds falls between interest dates, interest accrued since the last interest payment would be O a. added to; debited to Interest Revenue O b. subtracted from; debited to Interest Revenue O c. subtracted from; credited to Interest Revenue O d. added to; credited to Interest Revenue the sale proceeds and
The printing costs and legal fees associated with the issuance of
bonds should
Select one:
a.
be expensed when incurred.
O b. be reported as a deduction from the face amount of bonds
payable.
c. not be reported as an expense until the period the bonds
mature or are retired.
d. be recorded as a reduction of the bond issue amount and
then amortized over the life of the bonds.
How is the premium or discount on debt investments at fair value through profit or loss accounted for?
As part of amortized cost and amortized over the life of the bonds.
As part of the cost until the disposal of the asset.
As expense or revenue in the period the bonds are purchased.
All of the above.
Chapter 14 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 14 - Prob. 1GICh. 14 - Why does issuing debt result in an income tax...Ch. 14 - At the beginning of 2018, corporate tax rates...Ch. 14 - What is a bond? Define face value, maturity date,...Ch. 14 - What is the difference between a mortgage bond and...Ch. 14 - Prob. 6GICh. 14 - Prob. 7GICh. 14 - Prob. 8GICh. 14 - Prob. 9GICh. 14 - Prob. 10GI
Ch. 14 - Prob. 11GICh. 14 - Prob. 12GICh. 14 - Prob. 13GICh. 14 - Prob. 14GICh. 14 - What is a call provision? Why do companies often...Ch. 14 - Prob. 16GICh. 14 - When do companies recognize gains and losses from...Ch. 14 - Prob. 18GICh. 14 - Prob. 19GICh. 14 - Prob. 20GICh. 14 - Prob. 21GICh. 14 - Prob. 22GICh. 14 - Prob. 23GICh. 14 - Prob. 24GICh. 14 - Prob. 25GICh. 14 - Prob. 26GICh. 14 - Prob. 27GICh. 14 - Prob. 28GICh. 14 - On January 1, 2019, Bay Company issues bonds with...Ch. 14 - Prob. 2MCCh. 14 - Prob. 3MCCh. 14 - Prob. 4MCCh. 14 - Prob. 5MCCh. 14 - Prob. 6MCCh. 14 - Prob. 7MCCh. 14 - When the cash proceeds from a bond issued with...Ch. 14 - On December 31, 2019, Dare Corporation had...Ch. 14 - Prob. 10MCCh. 14 - On January 1, 2019, Onslow Company borrowed...Ch. 14 - (Appendix 14.1)Pamlico Company has a 500,000, 15%,...Ch. 14 - Prob. 1RECh. 14 - Refer to the information in RE14-1. Assume Canglon...Ch. 14 - Prob. 3RECh. 14 - Prob. 4RECh. 14 - Prob. 5RECh. 14 - Prob. 6RECh. 14 - Prob. 7RECh. 14 - Prob. 8RECh. 14 - Prob. 9RECh. 14 - Prob. 10RECh. 14 - On January 1, 2019, Langdon Co. issues bonds with...Ch. 14 - Nolan Corporation has outstanding convertible...Ch. 14 - On January 1, 2019, Branson Corporation issued...Ch. 14 - On January 1, 2019, Boater Company issues a 20,000...Ch. 14 - On January 2, 2019, Jennings Company purchases...Ch. 14 - Determining the Proceeds from Bond Issues Madison...Ch. 14 - Prob. 2ECh. 14 - Prob. 3ECh. 14 - On January 1, 2019, Knorr Corporation issued...Ch. 14 - On January 1, 2019, Hackman Corporation issued 1...Ch. 14 - Prob. 6ECh. 14 - Chowan Corporation issued 100,000 of 10% bonds...Ch. 14 - Prob. 8ECh. 14 - Taylor Company issued 100,000 of 13% bonds on...Ch. 14 - On January 1, 2019, Calvert Company issues 12%,...Ch. 14 - Prob. 11ECh. 14 - On October 1, 2019, Ball Company issued 9% bonds...Ch. 14 - Prob. 13ECh. 14 - Prob. 14ECh. 14 - On December 1, 2017, Cone Company issued its 10%,...Ch. 14 - Prob. 16ECh. 14 - Prob. 17ECh. 14 - On July 1, 2020, Tuttle Company had bonds payable...Ch. 14 - On January 1, 2019, Conroe Corporation sold...Ch. 14 - Prob. 20ECh. 14 - On July 2, 2018, McGraw Corporation issued 500,000...Ch. 14 - Prob. 22ECh. 14 - January 1, 2019, Johnson Corporation issued a...Ch. 14 - Spath Company borrows 75,000 by issuing a 4-year,...Ch. 14 - Webb Corporation purchased an asset from Shaw...Ch. 14 - On January 1, 2019, Sanders Corporation purchased...Ch. 14 - On January 1, 2019, Billips Corporation purchased...Ch. 14 - On January 1, 2019, Northfield Corporation becomes...Ch. 14 - Prob. 29ECh. 14 - Prob. 30ECh. 14 - Prob. 31ECh. 14 - Prob. 1PCh. 14 - Prob. 2PCh. 14 - Prob. 3PCh. 14 - Prob. 4PCh. 14 - Bats Corporation issued 800,000 of 12% face value...Ch. 14 - Prob. 6PCh. 14 - Wilbury Corporation issued 1 million of 13.5%...Ch. 14 - Prob. 8PCh. 14 - Prob. 9PCh. 14 - Prob. 10PCh. 14 - Prob. 11PCh. 14 - Hamlet Corporation purchases computer equipment at...Ch. 14 - Prob. 13PCh. 14 - Restructuring (Debtor) Oakwood Corporation is...Ch. 14 - Prob. 15PCh. 14 - Tenth National Bank has a 200,000, 12% note...Ch. 14 - Prob. 1CCh. 14 - One way for a corporation to accomplish long-term...Ch. 14 - Prob. 3CCh. 14 - Recording Convertible Debt Zakin Co. recently...Ch. 14 - Prob. 5CCh. 14 - Long-Term Notes Payable Business transactions...Ch. 14 - Prob. 7CCh. 14 - On January 1, 2019, Brewster Company issued 2,000...Ch. 14 - Prob. 9CCh. 14 - You are an accountant for Taos Company, which has...Ch. 14 - Prob. 11CCh. 14 - Prob. 12CCh. 14 - Prob. 13C
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Similar questions
- Under IFRS, bond issuance costs, including the printing costs and legal fees associated with the issuance, should be:(a) expensed in the period when the debt is issued.(b) recorded as a reduction in the carrying value of bonds payable.(c) accumulated in a deferred charge account and amortized over the life of the bonds.(d) reported as an expense in the period the bonds mature or are redeemed.arrow_forward2. The printing costs and accounting/legal fees associated with the issuance of bonds should: (A) Be expensed when incurred. (B) Be reported as a deduction from the face amount of the bonds payable on the balance sheet. (C) Be accumulated in a deferred charge account (unamortized asset) and amortized to expense over the life of the bonds. (D) Be recorded as an expense all in the year the bonds mature or are retired. (E) None of the above.arrow_forwardThe 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.arrow_forward
- 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.arrow_forwardThe interest expense recorded on an interest payment date is increased a.by the amortization of premium on bonds payable b.only if the market rate of interest is less than the stated rate of interest on that date c.only if the bonds were sold at face value d.by the amortization of discount on bonds payablearrow_forwardBond issue costs, such as printing fees, legal fees, commissions, etc. are most appropriately accounted for by a. charging them to an expense account in the year the bonds are actually sold. b. debiting them to unamortized bond issue costs, setting them as a deferred charge on the statement of financial position, and amortizing them in a manner similar to bond discount over the life of the bond. c. charging them to an expense account in the year the bonds are originally dated whether or not they are sold in that year. d. considering them in the measurement of the bonds payable.arrow_forward
- The balance in Unamortized Discount on Bonds Payable should be Oa. reported separately in the Current Liabilities section of the balance sheef Ob. 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.arrow_forwardWhen bonds are issued at a premium and the effective interest method is used for amortization, at each subsequent interest payment date, the cash paid is: Select one: a. Less than the interest expense b. Equal to the interest expense c. Greater than the interest expense d. More than if the bonds had been sold at a discount e. Less than if the bonds had been sold at a discountarrow_forwardWhich of the following is classified as nonmonetary? a. Warranty liability b. Accrued expense c. Unamortized discount on bonds payable d. Refundable depositarrow_forward
- Which of the following is stated correctly? a. Current liabilities follow non-current liabilities on the statement of financial position under GAAP but non-current liabilities follow current liabilities under IFRS. b. IFRS does not treat debt modifications as extinguishments of debt. c. Bond issuance costs are recorded as a reduction of the carrying value of the debt under GAAP but are recorded as an asset and amortized to expense over the term of the debt under IFRS. d. Under GAAP, bonds payable is recorded at the face amount and any premium or discount is recorded in a separate account. Under IFRS, bonds payable is recorded at the carrying value so no separate premium or discount accounts are used.arrow_forwardIf a company invests in the debt instrument of another entity, any premium or discount is: Select one: a. included in other comprehensive income and amortized over the life of the instrument. b. included in the carrying value of the instrument and not amortized. c. amortized as part of interest income over the life of the instrument. d. immediately expensed to income.arrow_forwardThe current portion of long-term debt should Select one: a. be reclassified as a current liability. b. be classified as a long-term liability. C. not be separated from the long-term portion of debt. d. be paid immediately.arrow_forward
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