Question
1- The Daniels Corporation purchased $500,000 of 8%, 5-year bonds at 96 on February 1, 2010. Interest is to be paid semiannually on February 1
1- The Daniels Corporation purchased $500,000 of 8%, 5-year bonds at 96 on February 1, 2010. Interest is to be paid semiannually on February 1 and August 1. This is a held-to-maturity investment. This company uses the amortized cost method to amortize any premiums or discounts. What was the purchase price of these bonds?
| a. | $500,000 | |
| b. | $480,000 | |
| c. | $520,000 | |
| d. | $400,000 |
Refer to Question 1. What is the amount of Interest Revenue recorded on August 1, 2010?
| a. | $20,000 | |
| b. | $10,000 | |
| c. | $22,000 | |
| d.
| $15,000
|
Refer to Question 1. What is the carrying amount of the bond on August 1, 2010?
| a. | $483,000 | |
| b. | $482,000 | |
| c. | $480,000 | |
| d. | $500,000 |
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Selected Chapters From Managerial Accounting Creating Value In A Dynamic Business Environment
Authors: Ronald W. Hilton
Edition
0073043346, 978-0073043340
