A company issued 5-year, 7% bonds with a par value of $1,100,000. The market rate when the bonds were issued was 6.5%. The company received $1,111,000 cash for the bonds. Using the straight-line method, the amount of recorded interest expense for the first semiannual interest period is:

$75,900.0.

$37,400.

$77,000.

$77,000.

$38,500.

A company has bonds outstanding with a par value of $100,000. The unamortized discount on these bonds is $5,200. The company retired these bonds by buying them on the open market at 96. What is the gain or loss on this retirement?

$4,000 gain.

$4,000 loss.

$1,200 loss.

$0 gain or loss.

$1,200 gain.

A company has bonds outstanding with a par value of $170,000. The unamortized premium on these bonds is $4,505. If the company retired these bonds at a call price of 98, the gain or loss on this retirement is:

$3,400 gain.

$7,905 gain.

$3,400 loss.

$4,505 loss.

$4,505 gain.

A corporation borrowed $117,000 cash by signing a 5-year, 12% installment note requiring equal annual payments each December 31 of $32,457. What journal entry would the issuer record for the first payment?

Debit Interest Expense $9,057; debit Notes Payable $23,400; credit Cash $32,457.

Debit Notes Payable $32,457; credit Cash $32,457.

Debit Notes Payable $32,457; debit Interest Payable $14,040; credit Cash $46,497.

Debit Notes Payable $14,040; credit Cash $14,040.

Debit Interest Expense $14,040; debit Notes Payable $18,417; credit Cash $32,457.

On January 1, a company issues bonds dated January 1 with a par value of $270,000. The bonds mature in 5 years. The contract rate is 11%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $280,420. The journal entry to record the issuance of the bond is:

Debit Cash $280,420; credit Bonds Payable $280,420.

Debit Cash $280,420; credit Discount on Bonds Payable $10,420; credit Bonds Payable $270,000.

Debit Cash $270,000; debit Premium on Bonds Payable $10,420; credit Bonds Payable $280,420.

Debit Bonds Payable $270,000; debit Interest Expense $10,420; credit Cash $280,420.

Debit Cash $280,420; credit Premium on Bonds Payable $10,420; credit Bonds Payable $270,000.

On January 1, a company issues bonds dated January 1 with a par value of $340,000. The bonds mature in 5 years. The contract rate is 11%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $353,122. The journal entry to record the first interest payment using straight-line amortization is:

Debit Interest Expense $17,387.80; debit Premium on Bonds Payable $1,312.20; credit Cash $18,700.00.

Debit Interest Payable $18,700.00; credit Cash $18,700.00.

Debit Interest Expense $20,012.20; credit Premium on Bonds Payable $1,312.20; credit Cash $18,700.00.

Debit Interest Expense $20,012.20; credit Discount on Bonds Payable $1,312.20; credit Cash $18,700.00.

Debit Interest Expense $17,387.80; debit Discount on Bonds Payable $1,312.20; credit Cash $18,700.00.

On January 1, a company issues bonds dated January 1 with a par value of $360,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $374,613. The journal entry to record the first interest payment using the effective interest method of amortization is:

Debit Interest Expense $14,984.52; debit Discount on Bonds Payable $1,215.48; credit Cash $16,200.00.

Debit Interest Payable $16,200.00; credit Cash $16,200.00.

Debit Interest Expense 17,661.30; credit Premium on Bonds Payable $1,461.30; credit Cash $16,200.00.

Debit Interest Expense $14,738.70; debit Premium on Bonds Payable $1,461.30; credit Cash $16,200.00.

Debit Interest Expense $14,984.52; debit Premium on Bonds Payable $1,215.48; credit Cash $16,200.00.