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11 Adonis Corporation issued 10-year, 9% bonds with a par value of $290,000. Interest is paid semiannually. The market rate on the issue date was
11 Adonis Corporation issued 10-year, 9% bonds with a par value of $290,000. Interest is paid semiannually. The market rate on the issue date was 8% Adonis received $309,709 in cash proceeds. Which of the following statements is true? 8 Ons Multiple Choice o o Adonis must pay $290,000 at maturity plus 20 interest payments of $11,600 each, Adonis must pay $290,000 at maturity and no interest payments o O Adonis must pay $309.709 at maturity plus 20 interest payments of $13,050 each o O Adonis must pay $309.709 at maturity and no interest payments o Adonis must pay $290,000 at maturity plus 20 interest payments of $13.050 each. A bond traded at 102% means that: Multiple Choice The market rate of interest is 2.5% The market rate of interest is 25% above the contract rate The bonds were retired at $1,025 each The bond traded at 102.5% of its par value. The bond pays 25% interest 13 On January 1, Parson Freight Company issues 8.0%, 10-year bonds with a par value of $2,200,000. The bonds pay interest semiannually. The market rate of interest is 90% and the bond selling price was $2,050,507. The bond issuance should be recorded as: (3 30 Multiple Choice o Debit Cash $2.050 507, debit interest Expense $149,493, credit Bonds Payable $2,200.000 Debit Cash $2.200.000, credit Bonds Payable $2.050.507, credit Discount on Bonds Payable $49,493 Debit Cash $2.050.507, credit Bonds Payable $2,050.507 Debit Cash $2.200.000 credit Bonds Payable $2.200.000 Debit Cash $2.050.507, debt Discount on Bonds Payable $9.493 credit Bonds Payable $2.200.000
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