QUESTION 6 Use the following information to answer the following four (4) questions Greene Corp issued bonds on January 1, 2015 with the following terms Face Value $250,000 Coupon rate of interest 6 Term 5 year Interest Semi annual interest due on June 30 and Dec 31 Market rate of interest 4 Date Interest Expense Cash Interest Payment Premium Amortization Carrying Value 6 Determine what investors paid for these bonds A $219,630 B $250,000 C $261,784 D $272,457 E $342,827 QUESTION 7 Using the information from above Determine the amount of interest expense on this bond issuance on Greenes 2015 Income Statement A $5,408 B $10,857 C $15,368 D $15,000 E $10,939 QUESTION 8 Using the information from above Determine the unamortized premium or discount of the bonds as of December 31, 2015 A $18,314 B $12,457 C $26,518 D $23,825 E $7,457 QUESTION 9 Using the information from above Identify the total cost of borrowing that the corporation will incur over the life of this debt A $12,457 B $75,000 C $52,543 D $63,216 E $51,869 QUESTION 10 Destin Co issued $250,000, 9 , 10 year bonds on January 1, 2015 On December 31, 2016 (after the periodic interest payment was made), the unamortized discount is $642 On January 1, 2017, Destin retires one half of these bonds on the open market at 101 10 The journal entry to record the sale of this retirement of debt would include A a debit to Discount on Bonds Payable of $321 B a debit to Loss on Retirement of Bond of $2,196 C a credit to Discount on Bonds Payable of $624 D a debit to Loss on Retirement of Bond of $624 E a credit to Gain on Retirement of Bond of $2,196

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 15, 2024

QUESTION 6 Use the following information to answer the following four (4) questions: Greene Corp. issued bonds on January 1, 2015 with the following terms:

QUESTION 6

Use the following information to answer the following four (4) questions:

Greene Corp. issued bonds on January 1, 2015 with the following terms:

Face Value: $250,000

Coupon rate of interest: 6%

Term: 5 year

Interest: Semi-annual interest due on June 30 and Dec 31

Market rate of interest: 4%

Date

Interest Expense

Cash Interest Payment

Premium Amortization

Carrying Value

6. Determine what investors paid for these bonds:

A.
$219,630

B.
$250,000

C.
$261,784

D.
$272,457

E.
$342,827

QUESTION 7

Using the information from above...

Determine the amount of interest expense on this bond issuance on Greenes 2015 Income Statement:

A.
$5,408

B.
$10,857

C.
$15,368

D.
$15,000

E.
$10,939

QUESTION 8

Using the information from above...

Determine the unamortized premium or discount of the bonds as of December 31, 2015:

A.
$18,314

B.
$12,457

C.
$26,518

D.
$23,825

E.
$7,457

QUESTION 9

Using the information from above...

Identify the total cost of borrowing that the corporation will incur over the life of this debt:

A.
$12,457

B.
$75,000

C.
$52,543

D.
$63,216

E.
$51,869

QUESTION 10

Destin Co. issued $250,000, 9%, 10 year bonds on January 1, 2015. On December 31, 2016 (after the periodic interest payment was made), the unamortized discount is $642. On January 1, 2017, Destin retires one-half of these bonds on the open market at 101 .

10. The journal entry to record the sale of this retirement of debt would include:

	A.	a debit to Discount on Bonds Payable of $321
	B.	a debit to Loss on Retirement of Bond of $2,196
	C.	a credit to Discount on Bonds Payable of $624
	D.	a debit to Loss on Retirement of Bond of $624
	E.	a credit to Gain on Retirement of Bond of $2,196