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Chapter 22 - Long-Term Bonds
62. Retained earnings are often appropriated while the bonds are outstanding. Which of the
following is a reason for the appropriation?
63. Retained Earnings Appropriated for Bond Retirement appears as a separate line item
64. The difference between the face value and the selling price of a 10-year discounted bond
sold two years after authorization, is amortized for
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66. The board of directors of the Lawrence Corporation authorized the issuance of $500,000
face value of 10-year, 12 percent bonds dated May 1, 2013, and maturing on May 1, 2023.
Interest is payable semiannually on May 1 and November 1. Record the following bond
transactions on page 5 of a general journal. Omit descriptions.
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67. The board of directors of the Costmore Corporation authorized the issuance of $1,200,000
face value of 5-year, 8 percent bonds dated March 1, 2013, and maturing on March 1, 2015.
Interest is payable semiannually on September 1 and March 1. Record the following bond
transactions on page 6 of a general journal. Omit descriptions.
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70. The board of directors of the Columbus Corporation authorized the issuance of $400,000
face value of 10-year, 12 percent bonds dated April 1, 2013, and maturing on April 1, 2023.
Interest is payable semiannually on April 1 and October 1. Each bond has a face value of
$1,000. Because the funds to be raised were not immediately needed, no bonds were issued
until 2015. Record the following transactions on page 8 of a general journal. Omit
descriptions.
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71. The board of directors of the Merced Corporation authorized the issuance of $200,000
face value of 10-year, 12 percent bonds dated April 1, 2013, and maturing on April 1, 2023.
Interest is payable semiannually on April 1 and October 1. Each bond has a face value of
$1,000. Because the funds to be raised were not immediately needed, no bonds were issued
until 2015. Record the following transactions on page 9 of a general journal. Omit
descriptions.
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74. The Morris Corporation has outstanding $300,000 face value of 12 percent bonds payable
dated January 1, 2013, and maturing 10 years later on January 1, 2023. The corporation is
required under the bond contract to transfer $30,000 each year to a bond sinking fund
investment. The cash in the sinking fund investment is invested to earn interest. Record the
following entries on page 6 of a general journal. Omit descriptions.
