Question
MC Qu. 113 On January 1 of Year... On January 1 of Year 1, Congo Express Airways issued $4,500,000 of 7%, bonds that pay interest
MC Qu. 113 On January 1 of Year...
On January 1 of Year 1, Congo Express Airways issued $4,500,000 of 7%, bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $4,050,000 and the market rate of interest for similar bonds is 8%. The bond premium or discount is being amortized using the straight-line method at a rate of $15,000 every 6 months. The life of these bonds is:
Multiple Choice:
27 years
10 years.
15 years.
30 years.
30 years.
MC Qu. 117 On January 1, a company issued...
On January 1, a company issued and sold a $396,000, 7%, 10-year bond payable, and received proceeds of $391,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The journal entry to record the first interest payment is:
Multiple Choice:
Debit Bond Interest Expense $13,610; debit Discount on Bonds Payable $250; credit Cash $13,860.
Debit Bond Interest Expense $14,110; credit Cash $13,860; credit Discount on Bonds Payable $250.
Debit Bond Interest Expense $13,860; debit Discount on Bonds Payable $250; credit Cash $14,110.
Debit Bond Interest Expense $27,720; credit Cash $27,720.
Debit Bond Interest Expense $13,860; credit Cash $13,860.
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