Service

Chat Now

Question On January 1 of Year 1, Congo Express Airways issued $3,500,000of 7%, bonds that pay intere

Question On January 1 of Year 1, Congo Express Airways issued $3,500,000of 7%, bonds that pay intere

On January 1 of Year 1, Congo Express Airways issued $3,500,000of 7%, bonds that pay interest semiannually on January 1 and July1. The bond issue price is $3,197,389 and the market rate ofinterest for similar bonds is 8%. The bond premium or discount isbeing amortized using the straight-line method at a rate of $10,087every six months. The life of these bonds is:

Options: 15 years

30 years

26.5 years

32 years

35 years

A company issued 5-year, 7% bonds with a par value of $100,000.The market rate when the bonds were issued was 6.5%. The companyreceived $102,105 cash for the bonds. Using the straight-linemethod, the amount of recorded interest expense for the firstsemiannual interest period is:

Options:

$3,289.50.

$3,500.00.

$3,613,70.

$6,633.70.

$7,000.00.

A company has bonds outstanding with a par value of $100,000.The unamortized premium on these bonds is $2,700. If the companyretired these bonds at a call price of 99, the gain or loss on thisretirement is:

Options:

$1,000 gain.

$1,000 loss.

$2,700 loss.

$2,700 gain.

$3,700 gain.

 
manish jayant 22-Apr-2020

Answer (Solved)

question Get solution