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2. 3. Pn January 1, 2019 Redwood Company issues $500,000, 14%, 5-year bonds at a market rate of 12%, receiving $536,803. Interest is paid semi-annually
2. 3. Pn January 1, 2019 Redwood Company issues $500,000, 14%, 5-year bonds at a market rate of 12%, receiving $536,803. Interest is paid semi-annually each June 30 and December 31. The fiscal year of the company is the calendar year and the effective interest method is used to amortize discount and premium. 1. Redwood's June 30, 2019 entry to record the first semi-annual payment of interest includes a: a. debit to Interest Expense of $35,000. b. credit to Interest Payable of $35,000. C. credit to Premium on Bond Payable of $2,792. d. debit to Premium on Bond Payable of $2,792. Interest expense recorded with the December 31, 2019 journal entry is: a. $35,000. b. $30,000. c. $32,208. d. $32,041. e. $32,376. The total interest expense over the term of these bonds is: a. $350,000. b. $313,197. c. $386,803. d. $300,000. e. $263,197. 4. Bonds Payable of $1,000,000 were issued at face. When the issuing corporation calls the bonds at 101, the journal entry will include a: a. debit to interest expense of $10,000. b. credit to interest revenue of $10,000. C. credit to Bonds Payable of $1,000,000. credit to Cash of $990,000. d. e. debit to Loss on Redemption of $10,000. In January 1, 2019 Redwood Company issues $500,000,14%,5-year bonds at a market rate of 12%, receiving 3536, 803. Interest is paid semi-annually each June 30 and December 31 . The fiscal year of the company is the calendar year and the effective interest method is used to amortize discount and premium. 1. Redwood's June 30,2019 entry to record the first semi-annual payment of interest includes a: a. debit to Interest Expense of $35,000. b. credit to Interest Payable of $35,000. c. credit to Premium on Bond Payable of $2,792. d. debit to Premium on Bond Payable of $2,792. 2. Interest expense recorded with the December 31,2019 journal entry is: a. $35,000 b. $30,000. c. $32,208. d. $32,041 : c. $32,376. 3. The total interest expense over the term of these bonds is: a. $350,000. b. $313,197. c. $386,803. d. $300,000. c. $263,197. 4. Bonds Payable of $1,000,000 were issued at face. When the issuing corporation calls the bonds at 101 , the journal entry will include a: a. debit to interest expense of $10,000. b. credit to interest revenue of $10,000. c. credit to Bonds Payable of $1,000,000. d. credit to Cash of $990,000. e. debit to Loss on Redemption of $10,000
2. 3. Pn January 1, 2019 Redwood Company issues $500,000, 14%, 5-year bonds at a market rate of 12%, receiving $536,803. Interest is paid semi-annually each June 30 and December 31. The fiscal year of the company is the calendar year and the effective interest method is used to amortize discount and premium. 1. Redwood's June 30, 2019 entry to record the first semi-annual payment of interest includes a: a. debit to Interest Expense of $35,000. b. credit to Interest Payable of $35,000. C. credit to Premium on Bond Payable of $2,792. d. debit to Premium on Bond Payable of $2,792. Interest expense recorded with the December 31, 2019 journal entry is: a. $35,000. b. $30,000. c. $32,208. d. $32,041. e. $32,376. The total interest expense over the term of these bonds is: a. $350,000. b. $313,197. c. $386,803. d. $300,000. e. $263,197. 4. Bonds Payable of $1,000,000 were issued at face. When the issuing corporation calls the bonds at 101, the journal entry will include a: a. debit to interest expense of $10,000. b. credit to interest revenue of $10,000. C. credit to Bonds Payable of $1,000,000. credit to Cash of $990,000. d. e. debit to Loss on Redemption of $10,000.
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