1. A $600,000 bond was retired at 98 when the carrying value of the bond was $592,000. The entry to record the retirement would include a (Points : 2) gain on bond redemption of $8,000. loss on bond redemption of $8,000. loss on bond redemption of $4,000. gain on bond redemption of $4,000.Question 2. 2. Bond interest paid is (Points : 2) higher when bonds sell at a discount. lower when bonds sell at a premium. the same whether bonds sell at a discount or a premium. higher when bonds sell at a discount and lower when bonds sell at a premium.Question 3. 3. A bond with a face value of $200,000 and a quoted price of 102¼ has a selling price of (Points : 2) $240,450. $204,050. $200,450. $204,500.Question 4. 4. Lake Company received proceeds of $188,500 on 10-year, 8% bonds issued on January 1, 2011. The bonds had a face value of $200,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Lake uses the straight-line method of amortization.What is the amount of interest Lake must pay the bondholders in 2011? (Points : 2) $15,080 $16,000 $17,150 $14,850Question 5. 5. Jarmin Company received proceeds of $188,500 on 10-year, 8% bonds issued on January 1, 2011. The bonds had a face value of $200,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Jarmin uses the straight-line method of amortization.What is the carrying value of the bonds on January 1, 2013? (Points : 2) $200,000 $190,800 $197,700 $189,650Question 6. 6. A $600,000 bond was retired at 103 when the carrying value of the bond was $622,000. The entry to record the retirement would include a (Points : 2) gain on bond redemption of $18,000. loss on bond redemption of $12,000. loss on bond redemption of $18,000. gain on bond redemption of $4,000.Question 7. 7. If bonds with a face value of $150,000 are converted into common stock when the carrying value of the bonds is $135,000, the entry to record the conversion will include a debit to (Points : 2) Bonds Payable for $150,000. Bonds Payable for $135,000. Discount on Bonds Payable for $15,000. Bonds Payable equal to the market price of the bonds on the date of conversion.Question 8. 8. A bond trustee does not (Points : 2) issue the bonds. keep a record of each bondholder. hold conditional title to pledged property. maintain custody of unsold bonds.Question 9. 9. Lark Corporation retires its $800,000 face value bonds at 105 on January 1, following the payment of annual interest. The carrying value of the bonds at the redemption date is $829,960. The entry to record the redemption will include a (Points : 2) credit of $10,040 to Loss on Bond Redemption. debit of $10,040 to Loss on Bond Redemption. credit of $10,040 to Premium on Bonds Payable. debit of $40,000 to Premium on Bonds Payable.Question 10. 10. Hernandez Corporation issues 3,000, 10-year, 8%, $1,000 bonds dated January 1, 2012, at 98. The journal entry to record the issuance will show a (Points : 2) debit to Cash of $3,000,000. credit to Discount on Bonds Payable for $60,000. credit to Bonds Payable for $3,040,000. debit to Cash for $2,960,000.
