Question
7. On January 31, 2018, B Corp. issued $550,000 face value, 11% bonds for $550,000 cash. The bonds are dated December 31, 2017, and mature
7. On January 31, 2018, B Corp. issued $550,000 face value, 11% bonds for $550,000 cash. The bonds are dated December 31, 2017, and mature on December 31, 2027. Interest will be paid semiannually on June 30 and December 31.
What amount of accrued interest payable should B report in its September 30, 2018, balance sheet? (Do not round intermediate calculations.)
MULTIPLE CHOICE
a. $15,125
b. $30,250
c. $45,375
d. $40,333
8. Auerbach Inc. issued 9% bonds on October 1, 2018. The bonds have a maturity date of September 30, 2028 and a face value of $275 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2019. The effective interest rate established by the market was 11%.
How much cash interest does Auerbach pay on March 31, 2019? (Answer should be in million rounded to two decimal places.)
MULTIPLE CHOICE
a. $15.13 million
b. $30.25 million
c. $24.75 million
d. $12.38 million
10. On February 1, 2017, Pat Weaver Inc. (PWI) issued 11%, $1,200,000 bonds for $1,500,000. PWI retired all of these bonds on January 1, 2018, at 102. Unamortized bond premium on that date was $122,400. How much gain or loss should be recognized on this bond retirement?
MULTIPLE CHOICE
a. $132,000 gain
b. $98,400 gain
c. $0 gain
d. $165,000 gain
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