1.If bonds with a face value of $100,000 are issued at 105, what amount is recorded in the Premium on Bonds Payable account?

1. $105,000
2. $105
3. $5,000
4. $100,500

2.When bonds are issued at a premium:

1. The market rate of interest is higher than the stated rate
2. The market rate and the stated rate of interest are the same
3. The stated rate of interest exceeds the market rate
4. None of these choices are correct.

3.The premium on bonds payable is added to _________ to report the bond's carrying value.

1. Cash account
2. Bonds payable account
3. Interest expense account
4. Cash account and bonds payable account

4.If interest paid is $4,000 and premium amortized is $200, how much will go into the interest expense account?

1. $3,800
2. $4,200
3. $4,000
4. $0

5.How would you calculate the amount of premium amortized?

1. Dividing the premium at issuance with the number of interest payments.
2. Dividing the premium at issuance with the life of the bond.
3. Dividing the premium at issuance with the amount at maturity.
4. Dividing the premium at issuance with the face value of the bond.

1.When bonds are issued at their face amount, the journal entry will include a

1. credit to Premium on Bonds Payable.
2. debit to Discount on Bonds Payable.
3. credit to Cash.
4. credit to Bonds Payable.

2.What amount is the semiannual interest payment on a $10,000, 5% bond?

1. $250
2. $500
3. $2,500
4. None of these choices are correct.

3.The journal entry to record the amortization of a bond discount would include

1. a debit to Discount on Bonds Payable.
2. a credit to Discount on Bonds Payable.
3. a credit to Interest Expense.
4. All of these choices are correct.

4.The entry to amortize a bond premium would include a

1. debit to Premium on Bonds Payable.
2. credit to Premium on Bonds Payable.
3. debit to interest expense.
4. All of these choices are correct.

1.When an installment note is issued, the journal entry will include a

1. debit to Notes Payable.
2. debit to Cash.
3. credit to Cash.
4. None of these choices are correct.

2.On January 1, Year 1, Civic Company borrowed $200,000 on a 10-year, 7% installment note payable. The terms of the note require Civic to pay 10 equal payments of $25,000 each December 31 for 10 years. The required general journal entry to record the first payment on the note on December 31, Year 1 is:

1. debit Interest Expense, $14,000; debit Notes Payable, $11,000; credit Cash, $25,000.
2. debit Notes Payable, $14,000; debit Interest Expense, $11,000; credit Cash, $25,000.
3. debit Notes Payable, $25,000; credit Cash, $25,000.
4. None of these choices are correct.