Answer:

1)

answer is e - A loss of $4,000

Workings

Face value of bond = $50,000

Redemption Value = 50000*108% = $54,000

Since the company is paying $4000 more than what it had borrowed, the company will recognise a loss.

2) 

Answer

Correct Option = d. 3 Years

Formula

Depreciation on Straight-line basis = Cost of Asset - Residual Value / Total Useful life of the Asset

Depreciation on Straight-line basis = $ 3,000

Cost of Asset = $ 30,000

Residual Value = $ 6,000

Total Useful life of the Asset = $ 30,000 - $ 6,000 / $ 3,000 = 8 Years

Computation of years Completed

Years Completed = Total Accumulated Depreciation / Annual Depreciation

Total Accumulated Depreciation = $ 15,000

Annual Depreciation = $ 3,000

Years Completed = $ 15,000 / $ 3,000 = 5 Years

Computation of Remaining Useful life of the Plant Asset

Remaining Useful life of the Plant Asset = Total Useful life of the Asset - Years Completed

Total Useful life of the Asset = 8 Years

Years Completed = 5 Years

Remaining Useful life of the Plant Asset = 8 Years - 5 Years = 3 Years