Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

13. On June 30, 2016, Hardy Corporation issued $11.5 million of its 8% bonds for $10.4 million. The bonds were priced to yield 10%. The

13.

On June 30, 2016, Hardy Corporation issued $11.5 million of its 8% bonds for $10.4 million. The bonds were priced to yield 10%. The bonds are dated June 30, 2016, and mature on June 30, 2026. Interest is payable semiannually on December 31 and July 1. If the effective interest method is used, by how much should the bond discount be reduced for the six months ended December 31, 2016?

a) $66,500

b) $29,000

c) $58,500

d) $60,000

14. On January 1, 2016, Zebra Corporation issued 1,500 of its 11%, $1,000 bonds at 98.4. Interest is payable semiannually on January 1 and July 1. The bonds mature on January 1, 2026. Zebra paid $53,000 in bond issue costs. Zebra uses the straight-line amortization method. What is the bond book value reported in the December 31, 2016, balance sheet?

a) $1,538,400

b) $1,478,400

c) $2,250,000

d) $2,303,000

17.

Nickel Inc. bought $300,000 of 3-year, 7% bonds as an investment on December 31, 2015 for $321,000. Nickel uses straight-line amortization. On May 1, 2016, $60,000 of the bonds were redeemed at 118. As a result of the retirement, MSG will report (Do not round intermediate calculations and round final answer to nearest whole dollar.):

a) $9,000 loss

b) $7,067 loss

c) $12,000 gain

d) $7,067 gain

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Computer Aided Fraud Prevention And Detection A Step By Step Guide

Authors: David Coderre

1st Edition

0470392436, 978-0470392430

More Books

Students also viewed these Accounting questions