CONNECT PLUS-FINANCIAL & MANAGERIAL AC
7th Edition
ISBN: 2810020507384
Author: Wild
Publisher: MCG
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Question
Chapter C, Problem 1MCQ
To determine
Bonds:
Bonds are financial instrument, generally issued to raise a large amount of debt with an assurance to repay the sum with applicable interest.
To identify: The correct option
Expert Solution & Answer
Explanation of Solution
Option d, $625 is correct.
Given,
Interest rate is 5%.
Interest paid on February 1 and on August 1.
Calculate amount of interest accrued on December 31.
Formula to calculate the interest is,
Substitute $30,000 for value of bond, 5% for interest rate and 5 months (from August to December) in the above equation.
Thus, the amount of interest revenue accrued at December 31 is $625.
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4500 bonds with a face value of $1000 each, are sold at 101. The entry to record the issuance is
Cash
Premium on Bonds Payable
Bonds Payable
4545000
45000
4500000
Cash
4545000
Bonds Payable
4545000
Cash
Premium on Bonds Payable
Bonds Payable
Cash
Discount on Bonds Payable
Bonds Payable
4500000
45000
4545000
4545000
45000
4500000
Chapter C Solutions
CONNECT PLUS-FINANCIAL & MANAGERIAL AC
Ch. C - Prob. 1MCQCh. C - Prob. 2MCQCh. C - Prob. 3MCQCh. C - Prob. 4MCQCh. C - Prob. 5MCQCh. C - Prob. 1DQCh. C - Prob. 2DQCh. C - Prob. 3DQCh. C - Prob. 4DQCh. C - Prob. 5DQ
Ch. C - Prob. 6DQCh. C - Prob. 7DQCh. C - Prob. 8DQCh. C - Prob. 9DQCh. C - Prob. 10DQCh. C - Prob. 11DQCh. C - Prob. 12DQCh. C - Prob. 13DQCh. C - Prob. 14DQCh. C - Prob. 1QSCh. C - Prob. 2QSCh. C - Prob. 3QSCh. C - Prob. 4QSCh. C - Prob. 5QSCh. C - Prob. 6QSCh. C - Prob. 7QSCh. C - Prob. 8QSCh. C - Prob. 9QSCh. C - Prob. 10QSCh. C - Prob. 11QSCh. C - Prob. 12QSCh. C - Prob. 13QSCh. C - Prob. 14QSCh. C - Prob. 15QSCh. C - International accounting for investments P1 The...Ch. C - Prob. 1ECh. C - Prob. 2ECh. C - Prob. 3ECh. C - Prob. 4ECh. C - Prob. 5ECh. C - Exercise C-6 Transactions in short-term and...Ch. C - Prob. 7ECh. C - Prob. 8ECh. C - Prob. 9ECh. C - Prob. 10ECh. C - Prob. 11ECh. C - Prob. 12ECh. C - Prob. 13ECh. C - Prob. 14ECh. C - Prob. 15ECh. C - Prob. 1PSACh. C - Prob. 2PSACh. C - Prob. 3PSACh. C - Prob. 4PSACh. C - Prob. 5PSACh. C - Prob. 1PSBCh. C - Prob. 2PSBCh. C - Prob. 3PSBCh. C - Prob. 4PSBCh. C - Prob. 5PSBCh. C - Prob. 1SPCh. C - Prob. 1GLPCh. C - Prob. 2GLPCh. C - Prob. 1BTNCh. C - Prob. 2BTNCh. C - Prob. 3BTNCh. C - Prob. 4BTNCh. C - Prob. 5BTNCh. C - Prob. 6BTNCh. C - Prob. 7BTNCh. C - Prob. 8BTN
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