19. A bond with a face value of $200,000 and a quoted price of 97 has a selling

Question

19. A bond with a face value of $200,000 and a quoted price of 97 has a selling price of: A. $200,000. B. $206,000. C. $194,000. D. $203,000. E. $197,000. $624,000 on 20. Bonds with a stated interest rate of 9% and a face value totaling S600.000 were issued for January 1, 2017, when the market interest rate was 8%. T annually on December 31st. What amount of interest will the company pay the 2017? A. $58,800 B. $48,000 C. $49,200 D. $54,000 E. $56,160 he bonds mature in five years and pay interest bondholders on December 31, 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. D. credit to Bonds Payable of $490,000. E. credit to Discount on Bonds Payable of $10,000. 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: 22. 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

19 Selling price = 200000*0.97 = $194000 20 Interest to be paid = 600000*9% = $54000 21 Debit to discount on bonds payable for $10000 22 Bond's carrying value = 800000+24000 = $824000 23 Gain on retirement = (200000+5000)-(200000*1.01) = $3000 gain

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