1. If bonds for Crayon Corporation, with a face value of $150,000, are converted into common stock when the carrying value of the bonds is $135,000, the entry to record the conversion will include a debit to a.Discount on Bonds Payable for $15,000. b.Bonds Payable for $135,000. c. Bonds Payable for $150,000. d. Bonds Payable equal to the market price of the bonds on the date of conversion. e. none of the above

2. Genie Corporation is issuing $230,000 of 9%, 5-year bonds when potential bond investors want a return of 8%. Interest is payable semiannually. Instructions Compute the market price (present value) of the bonds. Important: round to the nearest penny in the middle of the problem. Round to the nearest dollar for your answer. If your answer is within $20 of one of the choices, please select that answer. a. $254,070 b. $230,000 c. $230,022 d. $239,350 e. none of the above

3. Sarbannes Company issues 9%, 20-year bonds with a par value of $750,000. The current market rate is 8%. The amount of interest owed to the bondholders for each semiannual interest payment is. a.$60,000. b.$67,500. c.$33,750. d.$30,000. e. $375,000. f.none of the above

4. Kraken Corporation issued 8% bonds with a par value of $1,000,000, receiving a $20,000 premium. On the interest date 5 years later, after the bond interest was paid and after 40% of the premium had been amortized, the corporation purchased the entire issue on the open market at 99 and retired it. The gain or loss on this retirement is: $22,000 gain. $10,000 gain. $10,000 loss. $-0- none of the above

5. On November 1, a $90,000, 7%, 3-year installment note payable is issued by Delta Company. The note requires that $30,000 of principal plus accrued interest be paid at the end of each year on October 30. Delta's journal entry to record the second annual interest payment would include:

A debit to Interest Expense for $6,300. A debit to Interest Expense for $4,200. A credit to Cash for $36,300. A credit to Cash for $30,000. none of the above