3.

On January 1, 2016, Solo Inc. issued 1,500 of its 6%, $1,000 bonds at 98. Interest is payable semiannually on January 1 and July 1. The bonds mature on January 1, 2026. Solo paid $66,000 in bond issue costs. Solo uses straight-line amortization. The amount of interest expense for the year is:

a) $99,600

b) $102,600

c) $93,000

d) $90,000

8.

On February 1, 2015, Pat Weaver Inc. (PWI) issued 10%, $1,100,000 bonds for $1,400,000. PWI retired all of these bonds on January 1, 2016, at 103. Unamortized bond premium on that date was $113,300. How much gain or loss should be recognized on this bond retirement?

a) $110,000 gain

b) $80,300 gain

c) $0 gain

d) $140,000 gain

12.

Auerbach Inc. issued 6% bonds on October 1, 2016. The bonds have a maturity date of September 30, 2026 and a face value of $430 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2017. The effective interest rate established by the market was 6%.

Assuming that Auerbach issued the bonds for $371,562,000, what would the company report for its net bond liability balance after its first interest payment on March 31, 2017, rounded up to the nearest thousand?

a) $358,662,024

b) $373,524,480

c) $356,699,000

d) $386,424,000