Q1: True or False: If the stated rate of interest of a bond is higher than the rate of interest paid on other bonds of equal risk, the bond will sell for more than face value. This statement is

Q2: On January 1, Year 1 Residence Company issued bonds with a $50,000 face value. The bonds were issued at 104 resulting in a 4% premium. They had a 20 year term and a stated rate of interest of 7%. Based on this information the carrying value of the bond liability on January 1, Year 1 is

A. 52,000

B. 50,000

C. 48,000

D. 46,500

Q3: On January 1, Year 1 Residence Company issued bonds with a $50,000 face value. The bonds were issued at 104 resulting in a 4% premium. They had a 20 year term and a stated rate of interest of 7%. Assuming a straight-line amortization of the discount, the amount of interest expense recognized on the December 31, Year 1 income statement is

A. 5,500

B. 3,400

C. 3,500

D. 3,600