10, wesley Corporation issued S600,000 of 10%, 20-year bonds on July 1, 2006, at 97, The bonds are dated July 1, 2006, mature on July 1, 2026 and call for semiannual interest payments on July 1 and January 1. The bond indenture provides that, upon proper notice, the issuing corporation may redeem its bonds, in whole or in part, on any date after December 31, 2006, at 105. In 2016 the corporation notifies holders of $200,000 face value of bonds will be called for redemption on July 1, 2016. Interest coupons for the interest payment due on July 1, 2016, are to remain attached to the bonds called for redemption. The company's accounting year ends on July 30. Assuming all of the bonds called are surrendered, the entry to record the redemption of the bonds is: A) Bonds Payable Bond Interest Payable Loss on Bond Redemption 200,000 10,000 10,000 Cash 220,000 200,000 10,000 13,000 B) Bonds Payable Bond Interest Payable Loss On Bond Redemption 220,000 Cash Discount on Bonds Payable 200,000 13,000 C) Bonds Payable Loss on Bond Redemption Cash Discount on Bonds Payable 210,000 3,000 D) Bonds Payable Discount on Bond Interest Payable Loss On Bond Redemption 10,000 19,000 Cash Bonds Payable 220,000 9,000 11. A 10-year lease of property requires annual rental payments on each December 31 of an amount equal to 5% of sales for the year then ended. The 10 annual rents can be described as an annuity. A) True B) False 12. A bond may be: A) callable. B) convertible C) redeemable through a sinking fund. D) All of the above answers are correct. Page 3