Write the letter of the best response in the left margin Radiator Springs\'s tri
ID: 2393604 • Letter: W
Question
Write the letter of the best response in the left margin Radiator Springs's trial balance shows $200,000 face value of bonds with a discount balance of $2,000. The bonds mature in 10 years. How will the bonds be presented on the balance sheet? 1. A. Bonds payable $198,000 (net of $2,000 discount) will be listed as a long-term liability. B. Bonds payable $200,000 will be listed as a long-term liability. A $2,000 discount on bonds payable will be listed as a contra liability C. Bonds payable $200,000 will be listed as a long-term liability D. Bonds payable $200,000 will be listed as a long-term liability. A S2,000 discount on bonds payable will be listed as a current liability. Bonds payable with face value of $400,000 and term of 10 years were issued on January 1, 2012, for $410,000. On the maturity date, what amount will the company pay to bondholders? 2. A. $400,000 B. $410,000 C. $390,000 D. $10,000 3. Which of the following is the correct journal entry to record the issuance of a $100,000 face value bond at 95 A. Cash 100,000 Discount on bonds payable 5,000 B. Cash C. Bonds payable D. Cash Bonds payable Bonds Payable Cash 95,000 95,000 95,000 95,000 95,000 95,000 Discount on bonds payable 5,000 Bonds payable 100,000 4. A $200,000 bond priced at 101.5 can be bought or sold for A. $200,000 plus interest. B. $203,000. C. $3,000. D. $197,000. 5, Lightning McQueen's bonds payable carry a stated interest rate of 5%, and the market rate of interest is 7%. The price of the Lightning's bonds will be at A. B. C. D. par value. a premium. maturity value. a discount.Explanation / Answer
1.B.Bonds payable $200,000 will be listed as a long term liability. A $2000 discount on bonds payable will be listed as contra liability.
2.A$400,000.
Face value will be repaid on maturity.
3.D.
the following will be journal entry:
4.B.$203,000.
(face value * quote % =>$200,000*101.5% =>$203,000).
5.D.a discount.
since the market rate of interest is greater than stated interest rate, the price of bonds will be at a discount.
1 cash a/c 95,000 discount on bonds payable 5000 .................To bonds payable a/c 100,000Related Questions
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