On January 1, Parson Freight Company issues 7% 10-year bonds with a par value of $2.000.000...

Transcribed Image Text:

On January 1, Parson Freight Company issues 7% 10-year bonds with a par value of $2.000.000 The bonds pay interest semiannualy. The market rate of interest is 8% and should be recorded as Muttle Choice O Debit Cash $1,864,097, ONDE ONCOL Sonos Payable $135,903 creat Bonds Payable $2.000.000 Debt Cash $164.09% debt interest Expense $35.5 O Debt Cash $2.000.000: credit Bonos Payabie $2.000.000 о скопскиотеко Bonds Payable 5:864097 Bonds Payale $2.000.000 Debt Ce $2.000.000rectors Pays $1864097 CHOT DISCOUm on Bones Pay $25.605 band selling price was $1,864,097. The bond issuance Amortizing a bond discount: Multiple Choice O O O Decreases the Bonds Payable account. Increases the market value of the Bonds Payable. Decreases Interest expense each period. Allocates a portion of the total discount to Interest expense each interest period. increases cash flows from the bond. A disadvantage of bond financing is: Multiple Choice O O O O Interest on bonds is tax deductible. Bonds do not affect owners' control. It allows firms to trade on the equity. Bonds pay periodic Interest and the repayment of par value at maturity. Bonds can increase return on equity. 0 A company must pay the bank a single payment of $20.000 cash in 3 years for a loan it entered into. The loan is at 8% interest compounded annually. The present value factor for 3 years at 8% 07938. The present value of an annulty factor for 3 years at %s 2.577 The present value of the loan grounded) Me Choice O$20000 O O$9542 0 0 www. A company issued 8%, 15-year bonds with a par value of $550.000 that pay interest serannually. The market rate on the date Multiple Choice O Deot Bond interest Expense $22.000; creat Cash $22.000 Deot Bond interest Payable $22.000 oret Cash $22.000 O Den Bonterest Expense $44.000 cet Cash $44.000 O Deat Bong merest Expense $550.000 cea ce $550.000 Notresence no Issuance 8% The journal erty to record ach semiannual interest payment On January 1, Parson Freight Company issues 7% 10-year bonds with a par value of $2.000.000 The bonds pay interest semiannualy. The market rate of interest is 8% and should be recorded as Muttle Choice O Debit Cash $1,864,097, ONDE ONCOL Sonos Payable $135,903 creat Bonds Payable $2.000.000 Debt Cash $164.09% debt interest Expense $35.5 O Debt Cash $2.000.000: credit Bonos Payabie $2.000.000 о скопскиотеко Bonds Payable 5:864097 Bonds Payale $2.000.000 Debt Ce $2.000.000rectors Pays $1864097 CHOT DISCOUm on Bones Pay $25.605 band selling price was $1,864,097. The bond issuance Amortizing a bond discount: Multiple Choice O O O Decreases the Bonds Payable account. Increases the market value of the Bonds Payable. Decreases Interest expense each period. Allocates a portion of the total discount to Interest expense each interest period. increases cash flows from the bond. A disadvantage of bond financing is: Multiple Choice O O O O Interest on bonds is tax deductible. Bonds do not affect owners' control. It allows firms to trade on the equity. Bonds pay periodic Interest and the repayment of par value at maturity. Bonds can increase return on equity. 0 A company must pay the bank a single payment of $20.000 cash in 3 years for a loan it entered into. The loan is at 8% interest compounded annually. The present value factor for 3 years at 8% 07938. The present value of an annulty factor for 3 years at %s 2.577 The present value of the loan grounded) Me Choice O$20000 O O$9542 0 0 www. A company issued 8%, 15-year bonds with a par value of $550.000 that pay interest serannually. The market rate on the date Multiple Choice O Deot Bond interest Expense $22.000; creat Cash $22.000 Deot Bond interest Payable $22.000 oret Cash $22.000 O Den Bonterest Expense $44.000 cet Cash $44.000 O Deat Bong merest Expense $550.000 cea ce $550.000 Notresence no Issuance 8% The journal erty to record ach semiannual interest payment

Answer rating: 100% (QA)

QUESTION On January 1 Parson Freight Company Issues 7 10year bonds with a par value of 2000000 The bonds pay interest semiannually The market rate of ... View the full answer