C) Debit Investment in Bonds $2 million, credit Investment Revenue $2 million li

Question

C) Debit Investment in Bonds $2 million, credit Investment Revenue $2 million limOT, Clealt Bonds Payable $2 million No entry needed. E) None of the above is correct. On November 1, 20A, Duval Company sold (issued) 300, $1,000, ten-year, 7% bonds at 97. The bonds were dated November 1, 20A, and interest is payable each November 1 and May 1. The amount of bond discount amortization at each semi- annual interest date would be (assume straight-line amortization): A) S 50 B) $100 C) $600. $450 E) None of the above is correct. n January 1, 20A, A-Ace Corp. issued $3,000,000 par value 12%, 10 year bonds her 3 1 If the market rate of interest was 14%, the

Explanation / Answer

Bond face value = 300*1000 = 300000

Bonds issue price = 300*970 = 291000

Total discount = 300000-291000 = 9000

Installment = 10*2=20

Bonds amortization on each semi annual installment = 9000/20 =450

so answer is d) $450

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