On May 1, 2010, Krypton Corporation sold $150,000 of its 15%, five-year bonds dated January 1, 2010, for 100 plus accrued interest. How much cash was received? a. $107,500 b. $150,000 c. $157,500 d. $100,000 Nazzi, Inc. sold $400,000 of its 9%, five-year bonds dated January 1, 2010, on May 1, 2010, for $393,000 plus accrued interest. Interest is paid on January 1 and July 1 and straight-line amortization is used. 4. Refer to Exhibit 14-3. The net liability for the bonds after recording the sale would be a. $408,000 b. $407,700 c. $400,000 d. $393,000 Refer to Exhibit 14-3. Interest expense after the July 1, 2010, interest payment has been posted is a. $12,500 b. $ 6,250 c. $12,000 d. $18,000 Refer to Exhibit 14-3. The balance of Discount on Bonds Payable after the December 31, 2010, adjusting entry has been posted would be a. $5,600 b. $6,000 c. $7,000 d. $8,400 Exhibit 14-4 A $300,000, ten-year, 6% bond issue was sold to yield 7% interest payable annually. Actuarial information for 10 periods is as follows: 6% 7% Present value of 1 .558 .508 Present value of an annuity of 1 7.360 7.024 Refer to Exhibit 14-4. These bonds sold at a. a premium b. a discount c. par d. cannot be determined from the information given Refer to Exhibit 14-4. At date of issuance cash received would be a. $278,832 b. $293,820 c. $299,904 d. $300,000 Refer to Exhibit 14-4. The discount at the date of bond issuance would be a. $ 0 b. $ 96 c. $ 6,180 d. $21,168 Refer to Exhibit 14-4. Using the effective interest method interest expense at the end of the first year is a. $21,000 b. $19,518 c. $18,000 d. $16,730