165. On January 1, a company issues bonds dated January 1 with a par value of $250,000. The bonds mature in 3 years. The contract rate is 6%, and interest is paid semiannually on June 30 and December 31. The market rate is 7%. Using the present value factors below, the issue (selling) price of the bonds is:

n=		i=			Present Value of an Annuity			Present value of $1
3		6.0	%			2.6730		0.8396
6		3.0	%			5.4172		0.8375
3		7.0	%			2.6243		0.8163
6		3.5	%			5.3286		0.8135

• $243,340.

• $256,661.

• $203,375.

• $39,965.

• $250,000.

200. Wallace and Simpson formed a partnership with Wallace contributing $64,000 and Simpson contributing $44,000. Their partnership agreement calls for the income (loss) division to be based on the ratio of capital investments. The partnership had income of $135,000 for its first year of operation. When the Income Summary is closed, the journal entry to allocate partner income is: (Do not round intermediate calculations.)

• Debit Wallace, Capital $80,000; debit Simpson, Capital $64,000; credit Cash $135,000.

• Debit Cash $135,000; credit Wallace, Capital $80,000; credit Simpson, Capital $55,000.

• Debit Wallace, Capital $67,500; debit Simpson, Capital $67,500; credit Income Summary $135,000.

• Debit Income Summary $135,000; credit Wallace, Capital $80,000; credit Simpson, Capital $55,000.

• Debit Income Summary $135,000; credit Wallace, Capital $67,500; credit Simpson, Capital $67,500.