MC Qu. 140 A corporation issued... A corporation issued 8% bonds with a par valu
ID: 2339267 • Letter: M
Question
MC Qu. 140 A corporation issued...
A corporation issued 8% bonds with a par value of $1,140,000, receiving a $48,000 premium. On the interest date 5 years later, after the bond interest was paid and after 40% of the premium had been amortized, the corporation purchased the entire issue on the open market at 99 and retired it. The gain or loss on this retirement is:
Multiple Choice:
$0.
$11,400 gain.
$11,400 loss.
$40,200 gain.
$40,200 loss.
MC Qu. 141 On August 1...
On August 1, a $49,200, 7%, 3-year installment note payable is issued by a company. The note requires equal payments of principal plus accrued interest be paid each year on July 31. The present value of an annuity factor for 3 years at 7% is 2.6243. The present value of a single sum factor for 3 years at 7% is 0.8163. The payment each July 31 will be:
Multiple Choice:
$16,400.00.
$18,747.74.
$17,200.00.
$16,800.00.
$2,347.74.
MC Qu. 143 On July 1, Shady Creek Resort borrowed...
On July 1, Shady Creek Resort borrowed $460,000 cash by signing a 10-year, 9.5% installment note requiring equal payments each June 30 of $73,262. What amount of interest expense will be included in the first annual payment?
Multiple Choice:
$43,700
$430,438
$46,000
$73,262
$29,562
Explanation / Answer
MC Qu. 140) answer : $40200 gain Received benefits - Payment made (1140000 + 28800) - 1140000 *99% 1168800 - 1128600 = 40200 gain MC Qu. 141) answer: $18747.74 Par value / A/f(7%,3) 49200 / 2.6243 = 18747.74 MC Qu. 143) answer: $43700 Borrowed * interest rate 460000 * 9.5% = 43700
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