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Question 28 (1 point) Arrieta Company purchased $2,250,000 of 8% bonds of Baez Company on January 1, 2023, paying $1,969,601. The bonds mature January 1,
Question 28 (1 point) Arrieta Company purchased $2,250,000 of 8% bonds of Baez Company on January 1, 2023, paying $1,969,601. The bonds mature January 1, 2033; interest is payable each July 1 and January 1. The effective yield on the bonds is 10%. Arrieta Company uses the effective-interest method and plans to hold these bonds to maturity. What should the company record as total Interest Revenue for the first year of 2023? a) 197,384 b) 225,000 c) 196,384 d) 180,000 Question 29 (1 point) Gray Construction enters into a contract with a customer to build a warehouse for $950,000 on March 30, 2022 with a performance bonus of $50,000 if the building is completed by July 31, 2022. The bonus is reduced by $10,000 each week that completion is delayed. Gray commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by Probability July 31, 2022 65% August 7, 2022 25% August 14, 2022 5% August 21, 202 5% The transaction price for this transaction is a) $685,000 b) $950,000 c) $995,000 d) $652,500 Question 30 (1 point) Arrieta Co. issues a convertible bond with detachable stock warrants on May 1, 2024. When recording the journal entry for the issuance of the bond with detachable warrants, the Arrieta Co. should credit a) Paid-in Capital in Excess of Par - Common Stock b) Paid-in Capital - Stock Warrants. c) Cash. d) Stock Warrant Liability. Question 31 (1 point) On April 15, 2023, Rizzo Inc. purchased 34,500 shares of Hernandez, Inc. for $22 per share (passive interest). During the year Rizzo Inc. sold 4,500 shares of Hernandez, Inc. for $25 per share. Rizzo Inc. started operations on January 1, 2023. At December 31, 2023 the market price of Hernandez, Inc.'s stock was $19 per share. What is the total amount of unrealized gain (loss) that Rizzo Inc. will report through its income statement for the year ended December 31, 2023 related to its investment in Hernandez, Inc. stock? a) ($103,500) b) ($90,000) c) $13,500 d) ($76,500)
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