MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Morgan Company issues 9%, 20-year bonds with a par value of $750,000 that pay interest semiannually. The amount paid to the bondholders for each semiannual interest payment is A) S33,750. B) $30,000 C) $60,000 D) $67,500. E) $375,000 2) 2) On January 1, a company issued and sold a $400,000, 7%, 10-year bond payable, and received proceeds of $396,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The carrying value of the bonds immediately after the second interest payment is: A) S396,400. B) 5399.800 C) $400,000 D) 5395,800 E) S396,200 3) A company issued 10-year, 7% bonds with a par value of $100,000. The company received $96,526 for the bonds. Using the straight-line method, the amount of interest expense for the first semiannual interest period is: A) $7.347.40 B) 53,326.00 C) $3,500.00 D) $7,000.00 E) 53,673.70 4) On January 1, a company issues bonds dated January 1 with a par value of $300,000. 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 $312,177. The journal entry to record the first interest payment using straight-line amortization is: A) Debit Interest Payable S13,500; credit Cash $13,500.00 B) Debit Bond Interest Expense S12,282.30; debit Discount on Bonds Payable $1,217.70; credit Cash $13,500.00 c) Debit Bond Interest Expense S12,282.30; debit Premium on Bonds Payable $1,217.70; credit Cash $13,500.00 D) Debit Bond Interest Expense S14,717.70; credit Premium on Bonds Payable $1,217.70; credit Cash $13,500.00 E) Debit Bond Interest Expense $14,717.70; credit Discount on Bonds Payable $1,217.70; credit Cash $13,500.00 5)_ 5) A company has bonds outstanding with a par value of $100,000. The unamortized premium on these bonds is $2,700. If the company retired these bonds at a call price of $99,000, the gain or loss on this retirement is: A) 53,700 gain. B) $1,000 gain. C) $2,700 gain. D) $2,700 loss. E) $1,000 loss