1. Bonds with a face value of $200,000 were issued at 103. The entry to record the issuance will include a credit to the Bonds Payable account for:

A. $206,000
B. $200,000
C. $103,000
D. $230,000


2. On December 31, 2010, a corporation issued $200,000 face value, 12 percent bonds that mature 10 years from the date of issue. The issue price was 97. If the firm uses the straight-line method of amortization, interest expense for 2011 will be reported at:

A. $24,600
B. $24,000
C. $23,400
D. $19,400


3. Question: The Premium on Bonds Payable account is shown in the:

A. Current Assets section of the balance sheet
B. Current Liabilities section of the balance sheet
C. Long-Term Liabilities section of the balance sheet
D. Revenue section of the income statement


4. Question: The entry to record the adjustment for accrued bond interest includes a debit to __________ and a credit to __________.

A. Bond Interest Expense; Cash
B. Bond Interest Expense; Bond Interest Payable
C. Bond Interest Payable; the Bond Interest Expense
D. Bond Interest Expense; Bonds Payable



5. Question: Bonds with a face value of $400,000 were issued at 98. The entry to record the issuance will include a credit to the Bonds Payable account for:

A. $408,000
B. $392,000
C. $400,000
D. $398,000

Answer rating: 100% (QA)

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