ot. 19. A bond A. $200,000, B. $206,000 C. $194,000 D. $203,000. E $197,000. 20.

Question

ot. 19. A bond A. $200,000, B. $206,000 C. $194,000 D. $203,000. E $197,000. 20. Bonds with a stated interest rate of 9% and a January 1, 2017, when the rate annually on December 3 1st. of interest 20172 A. face value totaling $600,000 were issued for $624,000 on The bonds mature in five years and pay interest nler-market interest rate was 8%. what amount of interest will the company pay the bondholders on December 31 $58,800 B. $48,000 C. 549.200 D. $54,000 E. $56,160 21. A company issues $500,000 in bonds at an issue price of 98. When recording this transaction the company will include a: A. debit to Discount on Bonds Payable of $10,000. B. debit to Bonds Payable of $500,000. C. debit to Cash of $500,000. credit to Bonds Payable of $490,000. credit to Discount on Bonds Payable of $10,000. D. E. 22, A company issued $800,000, 10-year, 4% bonds at a premium. If the balance in the Premium on Bonds Payable account is $24,000, the bonds' carrying value is: A. $800,000. B. $832,000. C. $824,000. D. $776,000. E. $768,000. 23. A company issued $200,000 of bonds. The company retires the bonds at 101 when the Premium on Bonds Payable has a balance of $5,000. As a result of the retirement of the bonds, the company will record a: A. $3,000 gain. B. $2,000 gain. C. $2,000 loss. D. $5,000 loss. E. $3,000 loss.

Explanation / Answer

Hence, $54,000 will be paid by the company to the bondholders on December 31,2017

Ans. To 19 Selling price of bond Face value X Quoted Price $2,00,000 X $97 $1,94,000 Ans. To 20 Amount of Interest Face value of bonds X Interest Rate $6,00,000 X 9% $54,000

Hence, $54,000 will be paid by the company to the bondholders on December 31,2017

Ans. To 21 Accounts and Titles Dr. Cr. Bank A/c           490,000 Discount on Bonds Payable A/c             10,000        To Bond A/c          500,000 Hence, debit to discount on bonds payable of $10000. Ans. To 22 Accounts and Titles Dr. Cr. Bank A/c           824,000        To 4% Bonds A/c          800,000        To Premium On bonds payable A/c            24,000 Hence, bonds carrying amount is $824000 Ans. To 23 Accounts and Titles Dr. Cr. Bonds Payable A/c           200,000 Premium on bonds payable   A/c               5,000        To Bank   A/c          202,000        To Gain on retirement of bonds A/c              3,000 Hence, company will record a gain of $3000 on the retiremnet of bonds

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