Hello, I need help answering these 6 questions. Thank you kindly for your time a
ID: 2749436 • Letter: H
Question
Hello, I need help answering these 6 questions. Thank you kindly for your time and your generous help.
1)
On January 1 of Year 1, Congo Express Airways issued $4,200,000 of 7%, bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $3,520,000 and the market rate of interest for similar bonds is 8%. The bond premium or discount is being amortized using the straight-line method at a rate of $50,000 every 6 months. The life of these bonds is:
8 years.
4 years.
6.8 years.
14 years.
7 years
2)
On January 1, a company issues bonds dated January 1 with a par value of $290,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 6% and the bonds are sold for $302,371. The journal entry to record the first interest payment using straight-line amortization is:
Debit Interest Payable $10,150.00; credit Cash $10,150.00.
Debit Bond Interest Expense $11,387.10; credit Premium on Bonds Payable $1,237.10; credit Cash $10,150.00.
Debit Bond Interest Expense $8,912.90; debit Discount on Bonds Payable $1,237.10; credit Cash $10,150.00.
Debit Bond Interest Expense $11,387.10; credit Discount on Bonds Payable $1,237.10; credit Cash $10,150.00.
Debit Bond Interest Expense $8,912.90; debit Premium on Bonds Payable $1,237.10; credit Cash $10,150.00.
3)
Chang Industries has bonds outstanding with a par value of $212,800 and a carrying value of $222,200. If the company calls these bonds at a price of $217,000, the gain or loss on retirement is:
$9,400 gain.
$5,200 gain.
$4,200 gain.
$5,200 loss.
$4,200 loss.
4)
A total asset turnover ratio of 2.2 indicates that:
For every $1 in sales, the firm acquired $2.2 in assets during the period.
For every $1 in assets, the firm produced $2.2 in net sales during the period.
For every $1 in assets, the firm earned gross profit of $2.2 during the period.
For every $1 in assets, the firm earned $2.2 in net income.
For every $1 in assets, the firm paid $2.2 in expenses during the period.
5)
Crestfield leases office space for $6,000 per month. On January 3, the company incurs $10,000 to improve the leased office space. These improvements are expected to yield benefits for 10 years. Crestfield has 5 years remaining on its lease. What journal entry would be needed to record the expense for the first year related to the improvements?
Debit Amortization Expense $1,000; credit Accumulated Amortization $1,000.
Debit Depletion Expense $2,000; credit Accumulated Depletion $2,000.
Debit Depreciation Expense $1,000; credit Accumulated Depreciation $1,000.
Debit Depletion Expense $10,000; credit Accumulated Depletion $10,000.
Debit Amortization Expense $2,000; credit Accumulated Amortization $2,000.
6)
An asset's book value is $18,200 on December 31, Year 5. The asset has been depreciated at an annual rate of $3,200 on the straight-line method. Assuming the asset is sold on December 31, Year 5 for $15,200, the company should record:
A gain on sale of $3,000.
A loss on sale of $1,800.
A gain on sale of $1,800.
Neither a gain nor a loss is recognized on this type of transaction.
A loss on sale of $3,000.
Hello, I need help answering these 6 questions. Thank you kindly for your time and your generous help.
1)
On January 1 of Year 1, Congo Express Airways issued $4,200,000 of 7%, bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $3,520,000 and the market rate of interest for similar bonds is 8%. The bond premium or discount is being amortized using the straight-line method at a rate of $50,000 every 6 months. The life of these bonds is:
Explanation / Answer
Answer 1: 7 Years
Answer 2: Debit Bond Interest Expense $8,912.90
Debit Premium on Bonds Payable $1,237.10
Credit Cash $10,150.00.
Answer 3: Gain $ 5,200
Answer 4: For every $1 in assets, the firm produced $2.2 in net sales during the period.
Answer 5: Debit Amortization Expense $2,000
Credit Accumulated Amortization $2,000.
Answer 6: A loss on sale of $3,000.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.