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Austin Corporation i on April 30, Year 2, at 100 plus accrued interest. Interest on the bonds is payable semianauan December 31. ss es$6,000,000 of

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Austin Corporation i on April 30, Year 2, at 100 plus accrued interest. Interest on the bonds is payable semianauan December 31. ss es$6,000,000 of 10%, 10-year bonds, dated December 31, Year 1. The bonds are issued each June 30 and 7) Refer to the information above. The total amount of cash received by Austin upon issuance of the bonds on April 30, Year 2, is: A) $6,300,000. B) $6,000,000. C) $6,150,000. D) 56,200,000. 8) If a bond is selling at 103, it is selling at: A) A premium. B) $103 per bond. C) Maturity value and yields a 2% interest rate. D) A discount. 9) Bonds, with the same face value, issued at a premium will: A) Have a different maturity value than a bond issued at a discount, depending upon the interest rate and maturity date. B) Have a greater maturity value than a bond issued at a discount. C) Have the same maturity value as a bond issued at a discount. D) Have a lesser maturity value than a bond issued at a discount. On April 1. Year 1. Greenway Corporation issues S20 million of 10%, 20-year bonds payable at par. Interest on the bonds is payable semiannually each April 1 and October 1. 10) Refer to the information above. The journal entry to record the first cash payment to bondholders on October 1, year I, will include: A) A credit to Cash of $2,000,000. B) A debit to Interest Expense of $1,000,000. C) A debit to Bonds Payable of $1,000,000. D) A credit to Interest Payable of $1,000,000. 1) Refer to the information above. The adjusting entry cif any)required on December 31, Year 1, related to this bond issue involves: A) A credit to Cash of $500,000 B) Recognition of interest expense of $1,000,000. C) A credit to Interest Payable of $2,000,000. D) Recognition of interest expense of $500,000. The account Discount on Bonds Payable has a debit balance and should appear on the balance sheet as an asset; the account Premium on Bonds Payable has a credit balance and should be classified as a liability A) True B) False A-2

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