On July 1, year 1, Cobb Company issued 9% bonds in the face amount of $1,000,000 that mature in 10 years. The bonds were issued for $939,000 to yield 10%, resulting in a bond discount of S61,000. Cobb uses the effective interest method of amortizing bond discount. Interest is payable annually on June 20. At June 30, year 3, Cobb's unamortized bond discount should be: a. $52,810 b. S57,100 c. $48,800 d. $43,000 On July 1, year 1, Planet Corporation sold Ken Company 10-year, 8% bonds with a face amount of $520,000. The market rate was 6%. The bonds pay interest semiannually on June 30 and December 31. For the six months ended December 31, year 1, what amount should Planet report as bond interest expense and long-term liability in the balance sheet and income statement for Year 1? 3, Income Statement a. b. C. d. Balance Sheet S511,200 S500,000 S504.400 $515,600 $31,200 $20,000 $ 4,400 $15,600 4. Clothes Horse Corp CCHC issued $500,000 bonds due in 10 years on January 1, year 1 at a premium for $567,105. Bond issue costs of $25,000 are being amortized over the 10-year life of the bonds under U.S. GAAP. On January 1, year 6, when the carrying value of the bond was $539,940, CHC retired the bonds at 102. What amount of gain should CHC record related to the a. S10,000 b. $17,440 c. $39,940 d. $52,440 Walco Manufacturing Inc. holds 500 convertible bonds from Indwell Semiconductor which it purchased on January 1, year 1 for S518,110. The face amount of each bond is $1,000. Each bond is convertible into one share of Indwell common stock. The par value of Indwell's stock is S55.00. On January 2, year 1, Walco converted half of the bonds to common stock. Indwell uses the book value method to record the conversion. In the journal entry to record the conversion, what amount will Indwell debit to the premium on bond payable? 5. a. b. $9,055 c. $13,750 d. $18,110 6. On July 1, year 1, after recording interest and amortization, Wake Company's shareholders converted $1,000,000 of its 10% convertible bonds into 50,000 shares of it $1 par value common stock. On the conversion date, the carrying amount of the bonds was $1,500,000, the market value of the bonds was $1,400,000, and Wake's common stock was publicly trading for $40 per