Explain Why on Answers.

3 4. 2. The entry to record the amortization of a premium on bonds payable on an interest payment date includes: a. debit Premium on Bonds Payable, credit Interest Revenue b. debit Interest Expense, credit Premium on Bond Payable c. debit Interest Expense, debit Premium on Bonds Payable, credit Cash d. debit Bonds Payable, credit Interest Expense The journal entry a company records for the issuance of bonds when the contract rate is greater than the market rate would be a. debit Bonds Payable, credit Cash b. debit Cash and Discount on Bonds Payable, credit Bonds Payable c. debit Cash, credit Premium on Bonds Payable and Bonds Payable d. debit Cash, credit Bonds Payable The joumal entry a company records for the payment of interest, interest expense, and amortization of bond discount is a. debit Interest Expense, credit Cash and Discount on Bonds Payable b. debit Interest Expense, credit Cash c. debit Interest Expense and Discount on Bonds Payable, credit Cash d. debit Interest Expense, credit Interest Payable and Discount on Bonds Payable 5. On January 1, 2010, the Baker Corporation issued 10% bonds with a face value of $50,000. The bonds are sold for $46,000. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, 2014. Baker records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31, 2010, is a. $4,000 b. $4,200 c. $5,400 d. $5,800 6. When the market rate of interest on bonds is higher than the contract rate, the bonds will sell at a premium their face value their maturity value a discount a. b. c. d. 8. The adjusting entry to record the amortization of a discount on bonds payable is a. debit Discount on Bonds Payable, credit Interest Expense b. debit Interest Expense, credit Discount on Bonds Payable c. debit Interest Expense, credit Cash d. debit Bonds Payable, credit Interest Expense