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Homework answers / question archive / Florida Atlantic University - ACG 2021 1)A company issues $100,000 of 5%, 10-year bonds dated January 1

Florida Atlantic University - ACG 2021 1)A company issues $100,000 of 5%, 10-year bonds dated January 1

Accounting

Florida Atlantic University - ACG 2021

1)A company issues $100,000 of 5%, 10-year bonds dated January 1. The bonds pay interest semiannually on June 30 and December 31 each year. If the bonds are sold at par value, the issuer records the sale with a _______

 

 

2. A company issues $50,000 of 8%, 10-year bonds dated January 1 that pay interest semiannually on June 30 and December 31 each year. If bonds are sold at par value, the issuer records the first semi-annual interest payment with a ___

 

 

3. Since bond market values are expressed as a percentage of their bond value, a

$1,000 bond that is being sold at 93 would be trading at ______

 

 

4. A company issues $400,000 of 8%, 10-year bonds dated January 1. The bonds pay interest semiannually on June 30 and December 31 each year. If bonds are sold at par value, the issuer records the sale with a credit to Bond Payable in the amount of____

 

 

5. A company issues $50,000 of 8%, 10-year bonds dated January 1 that pay interest semiannually on June 30 and December 31, each year. If bonds are sold at par value, the issuer records the payment of principal at maturity with a ______

 

 

6. Forever, Inc. announces an offer to issue bonds with a $100,000 par value, an 8% annual contract rate (paid semiannually) and a two-year life. The market rate is 10%, so the bonds will be sold at:

 

7. When the current market rate is less than the bond contract rate on the date of issuance, the bond will be sold at a_______

 

8. A company issues $100,000 of 5%, 10-year bonds dated January 1 that pay interest semiannually on June 30 and December 31 each year. If bonds are sold at par value, the issuer records the first semi-annual interest payment with a debit to which of the following accounts and in what amount?

 

9. A company issues $500,000 of 9%, 10-year bonds dated January 1 and pay interest semiannually on June 30 and December 31 each year. The bonds are sold for $480,000, yielding a discount of $20,000. Using the straight-line amortization method, the company will amortize the discount by_________on each semiannual interest payment

 

10. A company issues $100,000 of 6%, 10-year bonds dated January 1 that pay interest semiannually on each June 30 and December 31. If the issuer accepts $98,000 for the bonds, the issuer will record the sale with a________

 

 

11. A company issues $90,000 of 6%, 10-year bonds dated January 1 that pay interest semiannually on each June 30 and December 31. If the issuer accepts $85,000 for the bonds, the issuer will record the sale with a_______

 

12. A company issues $60,000 of 6%, 5-year bonds dated January 1 that pay interest semiannually on June 30 and December 31 each year. If the issuer accepts $62,000 for the bonds, the premium on bonds payable will_____

 

13. A company issues $80,000 of 6%, 5-year bonds dated January 1 that pay interest semiannually on June 30 and December 31 each year. If the issuer accepts $84,000 for the bonds, the issuer will record the sale with a_______

14. A $200,000 4 year bond was issued for $210,000. The semi-annual amortization of the bond premium using the straight-line method equals______

 

 

 

15. $55,000. The journal entry to record this transaction would record a________

 

16. When a bond is sold at a premium, the carrying value will _________each period that the premium is amortized.

 

17. When the market rate is 8%, a company issues $50,000 of 9%, 10-year bonds dated January 1, 2017, that mature on December 31, 2026, and pay interest semiannually for a selling price of $60,000. When the bonds mature, the issuer records its payment of principal with a________

18. A company borrows $60,000 from a bank to purchase equipment. It signs an 8% note requiring six annual payments of principal plus interest. This is an example of an______note

 

 

19. A company borrows $70,000 by signing a $70,000, 8%, 6-year note that requires equal payments of $15,142 at the end of each year. The first payment will record interest expense of $5,600 and will reduce principal by:

 

 

20. A company borrows $50,000 by signing a $50,000, 8% note that requires six equal payments of $10,816 at the end of each year. (The present value of an annuity of

 

six annual payments, discounted at 8% equals 4.6229.) - 50,000/4.6229 =

 

 

 

 

21. A company issued $50,000 of 8%, 10-year bonds on January 1. The bonds pay semi annual interest. The present value factor of a single amount of 20 periods at 8% is 0.2145.The present value of 10 periods at 4% is 0.6756. The present value of 20 periods at 4% is 0.4564. Determine the present value of the par value of the bonds.

 

 

 

 

 

22. The required semiannual interest payment for a premium bond using the effective interest amortization method includes the following:

 

 

23. Typical examples of asset's leased as a finance lease include all of the following except:

 

 

 

 

24. The journal entry for a right-of-use asset to record the periodic amortization includes a credit to:

 

 

 

 

25. Bilos Co. enters into a 6-year finance lease for a copy machine. The lease requires six annual payments of $25,000. Interest expense is recorded with a debit to the following accounts:

 

 

 

26. Winn Co. enters into a 6-year finance lease for a copy machine with an interest rate of 8% (the present value of its $1,298 annual lease payments is $6,000). Winn will record the first-period lease payment with a debit to Right-of-Use Asset in the amount of?

 

27. A company enters into an operating lease for a piece of machinery. The company calculates amortization on the equipment of $2,000 per year. The entry to record amortization expense the first year will include a credit to:

 

28. Which of the following agreements would require amortization expense?

 

29. A company enters into a short-term operating lease to use construction equipment for $3,000 per month. The journal entry to record one month's rent would include a credit to the cash account

 

A company enters into an operating lease for a piece of machinery. The company calculates amortization on the equipment of $2,000 per year. The entry to record amortization expense the first year will include a debit to:

 

 

 

 

 

 

 

 

 

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