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Homework answers / question archive / If bonds with a face value of $90,000 are converted into common stock when the carrying value of the bonds is $81,000, the entry to record the conversion will include a debit to a

If bonds with a face value of $90,000 are converted into common stock when the carrying value of the bonds is $81,000, the entry to record the conversion will include a debit to a

Accounting

If bonds with a face value of $90,000 are converted into common stock when the carrying value of the bonds is $81,000, the entry to record the conversion will include a debit to a. Bonds Payable for $90,000 b. Bonds Payable for $81,000 c. Discount on Bonds Payable for $9,000. d. Bonds Payable equal to the market price of the bonds on the date of conversion. 97. A $900,000 bond was retired at 98 when the carrying value of the bond was $888,000. The entry to record the retirement would include a a. gain on bond redemption of $12,000. b. loss on bond redemption of $6,000. C. loss on bond redemption of $12.000. d. gain on bond redemption of $6,000. 98. Twenty $1,000 bonds with a carrying value of $25,600 are converted into 2,000 shares of $5 par value common stock. The common stock had a market value of $9 per share on the date of conversion. The entry to record the conversion is a. Bonds Payable 25,600 Common Stock 10,000 Paid-in Capital in Excess of Par. 15,600 b. Bonds Payable 20,000 Premium on Bonds Payable 5,600 Common Stock 18,000 Paid-in Capital in Excess of Par 7,600 c. Bonds Payable 20,000 Premium on Bonds Payable 5.600 Common Stock 10.000 Paid-in Capital in Excess of Par 15,600 d. Bonds Payable 25,600 Common Stock 18,000 Paid-in Capital in Excess of Par. 7,600 Use the following information for questions 103-104 Delmar Company purchased a building on January 2 by signing a long-term $840,000 mortgage with monthly payments of $7,700. The mortgage carries an interest rate of 10 percent. 103. The entry to record the first monthly payment will include a a. debit to the Cash account for $7,700. b. credit to the Cash account for $7,000. C. debit to the Interest Expense account for $7,000. d. credit to the Mortgage Payable account for $7,700. 104. The amount owed on the mortgage after the first payment will be a. $840,000 b. $839,300. c. $833,000 d. $832.300 Use the following information for questions 105–106. Diamond Company borrowed $500,000 from BankTwo on January 1, 2007 in order to expand its mining capabilities. The five-year note required annual payments of $130,218 and carried an annual interest rate of 9.5%. 105. What is the amount of expense Diamond must recognize on its 2008 income statement? a. $47,500 b. $39.642 C. $35,129 d. $31,037 106 116 What is the balance in the notes payable account at December 31, 2008? a. $500,000 b. $326.706 C. $417.282 d. $405,000 In a recent year Dart Corporation had net income of $140,000, interest expense of $30,000, and tax expense of $20,000. What was Dart Corporation's times interest earned ratio for the year? a. 6.33 b. 4.66 C. 5.33 d. 6.00 117. In a recent year Day Corporation had net income of $150,000, interest expense of $30,000, and a times interest earned ratio of 9. What was Day Corporation's income before taxes for the year? a. $300,000 b. $270,000 c. $240,000

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