Question
X-corporation issued 10-year bonds with a par (face) value of $10,000,000 that pay 6% annual interest semiannually. The bonds were issued for $9,600,000. How much
X-corporation issued 10-year bonds with a par (face) value of $10,000,000 that pay 6% annual interest semiannually. The bonds were issued for $9,600,000. How much will the corporation have to pay to retire the debt on the maturity date?
a. $ 9,600,000 | ||
b. $ 10,000,000 | ||
c. $ 15,600,000 | ||
d. $ 15,760,000 |
Bonds with a par value (face value) of $4,000,000 and a carrying value of $3,970,000 were retired before maturity. The corporation paid $4,010,000 to retire the bonds. This early retirement of bonds would result in a
a. | $10,000 gain on bond retirement. | |
b. | $20,000 loss on bond retirement. | |
c. | $30,000 gain on bond retirement. | |
d. | $40,000 loss on bond retirement. | |
e. | $10,000 loss on bond retirement |
Bonds with a $12,000,000 face (par) value were issued at face value on November 1, 2015. The bonds pay interest semi-annually on May 1 and November 1. The annual rate of interest on the bonds is 6%. If the company adjusts yearly on December 31, how much interest will be recorded on the bond on the December 31, 2015 adjusting entry?
a. $ 720,000 | ||
b. $ 600,000 | ||
c. $ 120,000 | ||
d. $ 60,000 |
How much interest would be reported annually on a $2,000,000 face (par) value, 6% annual interest, 20-year bond?
a. $ 12,000 | ||
b. $ 6,000 | ||
c. $ 33,333 | ||
d. $ 60,000 | ||
e. $ 120,000 |
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