On March 31, 2016, Bundy Company retired $10,540,000 of bonds, which have an unamortized premium of $590,000, by paying bondholders $10,345,000. What is the amount of the gain or loss on the retirement of the bonds?

$195,000 loss.

$395,000 loss.

$195,000 gain.

$785,000 gain.

On January 1, 2016, Tonika Company issued a five-year, $10,000, 6% bond. The interest is payable annually each December 31. The issue price was $9,590 based on an 7% effective interest rate. Tonika uses the effective-interest amortization method.

The 2017 interest expense is closest to:

$580.

$600.

$575.

$676.

On July 1, 2017, immediately after recording interest payments, Salsa, Inc. retired one fifth of its $514,000 of bonds payable for $98,900. The bonds were originally issued at par value in 2012. Which of the following statements is correct?

A gain of $3,900 will be reported on the income statement.

A gain of $415,100 will be reported on the income statement.

A loss of $3,900 will be reported on the income statement.

Stockholders equity is not affected by the bond retirement.

On January 1, 2016, Tonika Company issued a four-year, $10,000, 8% bond. The interest is payable annually each December 31. The issue price was $9,676 based on an 9% effective interest rate. Tonika uses the effective-interest amortization method.

The book value of the bonds as of December 31, 2016 is closest to:

rev: 10_08_2016_QC_CS-64487

$9,747.

$9,605.

$71.

$8,876.

On January 1, 2016, Tonika Company issued a six-year, $10,000, 8% bond. The interest is payable annually each December 31. The issue price was $9,552 based on an 9% effective interest rate. Tonika uses the effective-interest amortization method.

The interest expense on the income statement for the year ended December 31, 2016 is closest to:

$9,678.

$9,712.

$860.

$9,767.

On January 1, 2016, a company issued $400,800 of 10-year, 12% bonds. The interest is payable semi-annually on June 30 and December 31. The issue price was $415,153 based on a 10% market interest rate. The effective-interest method of amortization is used. Rounding all calculations to the nearest whole dollar, what is the interest expense for the six-month period ending June 30, 2016?

$20,758.

$24,048.

$24,909.

$20,040.

On January 1, 2016, Broker Corp. issued $2,400,000 par value 11%, 11-year bonds which pay interest each December 31. If the market rate of interest was 13%, what was the issue price of the bonds? (The present value factor for $1 in 11 periods at 11% is 0.3173 and at 13% is 0.2607. The present value of an annuity of $1 factor for 11 periods at 11% is 6.2065 and at 13% is 5.6869.)

$2,400,000.

$2,697,913.

$2,262,832.

$2,127,022.

During 2016, Patty's Pizza reported net income of $3,212 million, interest expense of $187 million and income tax expense of $2,372 million. During 2015, Pattys reported net income of $2,568 million, interest expense of $183 million and income tax expense of $2,424 million. The times interest earned ratios for 2016 and 2015, respectively, are closest to:

30.86 and 28.28 times.

28.28 and 30.86 times.

28.86 and 26.28 times.

29.86 and 27.28 times.

On January 1, 2016, Tonika Company issued a four-year, $11,700, 7% bond. The interest is payable annually each December 31. The issue price was $10,918 based on an 8% effective interest rate. Tonika uses the effective-interest amortization method. Rounding calculations to the nearest whole dollar, which of the following journal entries correctly records the 2016 interest expense?

Interest expense	997
Bond discount		178
Cash		819

Interest expense	819
Cash		819

Interest expense	763
Bond discount	56
Cash		819

Interest expense	873
Bond discount		54
Cash		819

A Company retired $670,000 of bonds, which have an unamortized discount of $27,000, by repurchasing them for $670,000. What is the amount of the gain or loss on the retirement of the bonds?

There was a $27,000 gain.

There was a $27,000 loss.

There was a $670,000 loss.

There was no gain or loss.