97.
Interest expense on bonds payable is calculated as the:
98.
When bonds are issued at a discount, what happens to the carrying value and interest
expense over the life of the bonds?
99.
When bonds are issued at a premium, what happens to the carrying value and interest
expense over the life of the bonds?
100.
Bonds payable should be reported as a long-term liability in the balance sheet at:
101.
A bond issued at a discount indicates that at the date of issue:
102.
A bond issued at a premium indicates that at the date of issue:
103.
How would the carrying value of bonds payable change over time for bonds issued at a
discount and for bonds issued at a premium?
104.
The carrying value, using the effective interest method, would decrease each year:
105.
The carrying value, using the effective interest method, would increase each year:
106.
When bonds are issued at a discount and the effective interest method is used for
amortization, at each subsequent interest payment date, the cash paid is:
107.
When bonds are issued at a premium and the effective interest method is used for
amortization, at each subsequent interest payment date, the cash paid is:
108.
When bonds are issued at a discount and the effective interest method is used for
amortization, at each interest payment date, the interest expense:
109.
When bonds are issued at a premium and the effective interest method is used for
amortization, at each interest payment date, the interest expense:
110.
An amortization schedule for a bond issued at a discount:
111.
An amortization schedule for a bond issued at a premium:
112.
Discount-Mart issues $10 million in bonds on January 1, 2018. The bonds have a ten-year
term and pay interest semiannually on June 30 and December 31 each year. Below is a
partial bond amortization schedule for the bonds:
Date
Cash
Paid
Interest
Expense
Increase
in
Carrying
Value
Carrying
Value
1/1/2018
$8,640,967
6/30/2018
$300,000
$345,639
$45,639
8,686,606
12/31/2018
300,000
347,464
47,464
8,734,070
6/30/2019
300,000
349,363
49,363
8,783,433
12/31/2019
300,000
351,337
51,337
8,834,770
What is the stated annual rate of interest on the bonds? (Hint: Be sure to provide the
annual rate rather than the six month rate.)
113.
Discount-Mart issues $10 million in bonds on January 1, 2018. The bonds have a ten-year
term and pay interest semiannually on June 30 and December 31 each year. Below is a
partial bond amortization schedule for the bonds:
Date
Cash
Paid
Interest
Expense
Increase
in
Carrying
Value
Carrying
Value
1/1/2018
$8,640,967
6/30/2018
$300,000
$345,639
$45,639
8,686,606
12/31/2018
300,000
347,464
47,464
8,734,070
6/30/2019
300,000
349,363
49,363
8,783,433
12/31/2019
300,000
351,337
51,337
8,834,770
What is the market annual rate of interest on the bonds? (Hint: Be sure to provide the
annual rate rather than the six month rate.)
114.
Discount-Mart issues $10 million in bonds on January 1, 2018. The bonds have a ten-year
term and pay interest semiannually on June 30 and December 31 each year. Below is a
partial bond amortization schedule for the bonds:
Date
Cash
Paid
Interest
Expense
Increase
in
Carrying
Value
Carrying
Value
1/1/2018
$8,640,967
6/30/2018
$300,000
$345,639
$45,639
8,686,606
12/31/2018
300,000
347,464
47,464
8,734,070
6/30/2019
300,000
349,363
49,363
8,783,433
12/31/2019
300,000
351,337
51,337
8,834,770
What is the interest expense on the bonds in 2018?
115.
Discount-Mart issues $10 million in bonds on January 1, 2018. The bonds have a ten-year
term and pay interest semiannually on June 30 and December 31 each year. Below is a
partial bond amortization schedule for the bonds:
Date
Cash
Paid
Interest
Expense
Increase
in
Carrying
Value
Carrying
Value
1/1/2018
$8,640,967
6/30/2018
$300,000
$345,639
$45,639
8,686,606
12/31/2018
300,000
347,464
47,464
8,734,070
6/30/2019
300,000
349,363
49,363
8,783,433
12/31/2019
300,000
351,337
51,337
8,834,770
What is the carrying value of the bonds as of December 31, 2019?
116.
Tony Hawk’s Adventure (THA) issued callable bonds on January 1, 2018. THA’s accountant
has projected the following amortization schedule from issuance until maturity:
Date
Cash
Paid
Interest
Expense
Increase
in
Carrying
Value
Carrying
Value
1/1/2018
$194,758
6/30/2018
$7,000
$7,790
$790
195,548
12/31/2018
7,000
7,822
822
196,370
6/30/2019
7,000
7,855
855
197,225
12/31/2019
7,000
7,889
889
198,114
6/30/2020
7,000
7,925
925
199,039
12/31/2020
7,000
7,961
961
200,000
THA issued the bonds:
117.
Tony Hawk’s Adventure (THA) issued callable bonds on January 1, 2018. THA’s accountant
has projected the following amortization schedule from issuance until maturity:
Date
Cash
Paid
Interest
Expense
Increase
in
Carrying
Value
Carrying
Value
1/1/2018
$194,758
6/30/2018
$7,000
$7,790
$790
195,548
12/31/2018
7,000
7,822
822
196,370
6/30/2019
7,000
7,855
855
197,225
12/31/2019
7,000
7,889
889
198,114
6/30/2020
7,000
7,925
925
199,039
12/31/2020
7,000
7,961
961
200,000
THA issued the bonds for:
118.
Tony Hawk’s Adventure (THA) issued callable bonds on January 1, 2018. THA’s accountant
has projected the following amortization schedule from issuance until maturity:
Date
Cash
Paid
Interest
Expense
Increase
in
Carrying
Value
Carrying
Value
1/1/2018
$194,758
6/30/2018
$7,000
$7,790
$790
195,548
12/31/2018
7,000
7,822
822
196,370
6/30/2019
7,000
7,855
855
197,225
12/31/2019
7,000
7,889
889
198,114
6/30/2020
7,000
7,925
925
199,039
12/31/2020
7,000
7,961
961
200,000
The THA bonds have a life of:
119.
Tony Hawk’s Adventure (THA) issued callable bonds on January 1, 2018. THA’s accountant
has projected the following amortization schedule from issuance until maturity:
Date
Cash
Paid
Interest
Expense
Increase
in
Carrying
Value
Carrying
Value
1/1/2018
$194,758
6/30/2018
$7,000
$7,790
$790
195,548
12/31/2018
7,000
7,822
822
196,370
6/30/2019
7,000
7,855
855
197,225
12/31/2019
7,000
7,889
889
198,114
6/30/2020
7,000
7,925
925
199,039
12/31/2020
7,000
7,961
961
200,000
What is the annual stated interest rate on the bonds? (Hint: Be sure to provide the annual
rate rather than the six month rate.)
120.
Tony Hawk’s Adventure (THA) issued callable bonds on January 1, 2018. THA’s accountant
has projected the following amortization schedule from issuance until maturity:
Date
Cash
Paid
Interest
Expense
Increase
in
Carrying
Value
Carrying
Value
1/1/2018
$194,758
6/30/2018
$7,000
$7,790
$790
195,548
12/31/2018
7,000
7,822
822
196,370
6/30/2019
7,000
7,855
855
197,225
12/31/2019
7,000
7,889
889
198,114
6/30/2020
7,000
7,925
925
199,039
12/31/2020
7,000
7,961
961
200,000
What is the annual market interest rate on the bonds? (Hint: Be sure to provide the
annual rate rather than the six month rate.)
121.
X2 issued callable bonds on January 1, 2018. The bonds pay interest annually on
December 31 each year. X2’s accountant has projected the following amortization
schedule from issuance until maturity:
Date
Cash
Paid
Interest
Expense
Decrease
in
Carrying
Value
Carrying
Value
1/1/2018
$104,212
12/31/2018
$7,000
$6,253
$747
103,465
12/31/2019
7,000
6,208
792
102,673
12/31/2020
7,000
6,160
840
101,833
12/31/2021
7,000
6,110
890
100,943
12/31/2022
7,000
6,057
943
100,000
X2 issued the bonds:
122.
X2 issued callable bonds on January 1, 2018. The bonds pay interest annually on
December 31 each year. X2′s accountant has projected the following amortization
schedule from issuance until maturity:
Date
Cash
Paid
Interest
Expense
Decrease
in
Carrying
Value
Carrying
Value
1/1/2018
$104,212
12/31/2018
$7,000
$6,253
$747
103,465
12/31/2019
7,000
6,208
792
102,673
12/31/2020
7,000
6,160
840
101,833
12/31/2021
7,000
6,110
890
100,943
12/31/2022
7,000
6,057
943
100,000
X2 issued the bonds for:
123.
X2 issued callable bonds on January 1, 2018. The bonds pay interest annually on
December 31 each year. X2’s accountant has projected the following amortization
schedule from issuance until maturity:
Date
Cash
Paid
Interest
Expense
Decrease
in
Carrying
Value
Carrying
Value
1/1/2018
$104,212
12/31/2018
$7,000
$6,253
$747
103,465
12/31/2019
7,000
6,208
792
102,673
12/31/2020
7,000
6,160
840
101,833
12/31/2021
7,000
6,110
890
100,943
12/31/2022
7,000
6,057
943
100,000
The X2 bonds have a life of:
124.
X2 issued callable bonds on January 1, 2018. The bonds pay interest annually on
December 31 each year. X2’s accountant has projected the following amortization
schedule from issuance until maturity:
Date
Cash
Paid
Interest
Expense
Decrease
in
Carrying
Value
Carrying
Value
1/1/2018
$104,212
12/31/2018
$7,000
$6,253
$747
103,465
12/31/2019
7,000
6,208
792
102,673
12/31/2020
7,000
6,160
840
101,833
12/31/2021
7,000
6,110
890
100,943
12/31/2022
7,000
6,057
943
100,000
What is the annual stated interest rate on the bonds?
125.
X2 issued callable bonds on January 1, 2018. The bonds pay interest annually on
December 31 each year. X2’s accountant has projected the following amortization
schedule from issuance until maturity:
Date
Cash
Paid
Interest
Expense
Decrease
in
Carrying
Value
Carrying
Value
1/1/2018
$104,212
12/31/2018
$7,000
$6,253
$747
103,465
12/31/2019
7,000
6,208
792
102,673
12/31/2020
7,000
6,160
840
101,833
12/31/2021
7,000
6,110
890
100,943
12/31/2022
7,000
6,057
943
100,000
What is the annual market interest rate on the bonds?