140.Indicate whether each of the following statements about bonds payable is true or false._____ a) A convertible bond may be converted into stock of the issuing company at the option of the...

140.Indicate whether each of the following statements about bonds payable is true or false.


_____ a) A convertible bond may be converted into stock of the issuing company at the option of the bondholder.
_____ b) Businesses issue bonds to banks to borrow large amounts of cash.
_____ c) A debenture is an unsecured bond.
_____ d) Callable bonds may be turned in for early retirement at the option of the bondholder.
_____ e) The issuer of a bond receives cash when the bond is issued.

141.On January 1, 2013, O'Hara Co. issued bonds with a face value of $200,000 and a stated interest rate of 10%. The bonds have a life of ten years and were sold at 108. O'Hara uses the straight-line method to amortize bond discounts and premiums. On December 31, 2016, O'Hara called the bonds at 106. Indicate whether each of the following statements is true or false.


_____ a) The interest expense for 2013 was $20,000.
_____ b) The balance in the bonds payable account on December 31, 2016 was $200,000.
_____ c) The carrying value of bonds payable on December 31, 2016 was $209,600.
_____ d) When O'Hara repurchased the bonds, it had to recognize a gain in the amount of $2,400.
_____ e) When O'Hara repurchased the bonds, it had to recognize a loss in the amount of $2,400.