If the bond is sold at a premium -- How do you calculate the cash paid for inter

Question

If the bond is sold at a premium -- How do you calculate the cash paid for interest (NOT interest expense but the cash paid for interest)? Just the formula Carrying Value Market Rate Interest Time Bonds Payable +Discount Difference between Bonds Payable and cash earned Cash Pd-Principle Stated interest Rate Time What is the journal entry required for a stock split? increases expenses, decreases liabilities O reduces assets, reduces equity O There is no transaction required O increases liabilities, reduces equity A small stock dividend is recorded at? O its recorded as a stock split Its recorded at what every cost you would like to record the entry O the small stock dividend is recorded at market value O It isn't recorded

Explanation / Answer

1.

In bond, interest payment is constant over life of bond. bond trade at premium or discount because of chnage in market rate. So, interest payment on bond is equal to principle value multiplied by stated interest rate and total number of period.

Option (D) is correct answer.

2.

After stock split number of stock outstanding increase and stock price decrease. Market value of total equity remains constatnt before and after stock split. So there is no jouranl entry for stock split.

Option (C) is correct answer.

3.

A small stock dividend is recorded at market value. in this transaction, retained earnings is moving to paid is capital.

Option (C) is correct answer.

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