156.In the balance sheet, the account, Premium on Bonds Payable, is
a.added to bonds payable.
b.deducted from bonds payable.
c.classified as a stockholders' equity account.
d.classified as a revenue account.
157.Four thousand bonds with a face value of $1,000 each, are sold at 103. The entry to record the issuance is
a.Cash ...........................................4,120,000
Bonds Payable ...........................................4,120,000
b.Cash ...........................................4,000,000
Premium on Bonds Payable ....................................120,000
Bonds Payable ...........................................4,120,000
c.Cash ...........................................4,120,000
Premium on Bonds Payable ....................................120,000
Bonds Payable ...........................................4,000,000
d.Cash ...........................................4,120,000
Discount on Bonds Payable ....................................120,000
Bonds Payable ...........................................4,000,000
158.Bond interest paid is
a.higher when bonds sell at a discount.
b.lower when bonds sell at a premium.
c.the same whether bonds sell at a discount or a premium.
d.higher when bonds sell at a discount and lower when bonds sell at a premium.
159.Mendez Corporation issues 3,000, 10-year, 8%, $1,000 bonds dated January 1, 2011, at 103. The journal entry to record the issuance will show a
a.debit to Cash of $3,000,000.
b.credit to Premium on Bonds Payable for $90,000.
c.credit to Bonds Payable for $3,015,000.
d.credit to Cash for $3,090,000.
160.Herman Company received proceeds of $188,500 on 10-year, 8% bonds issued on January 1, 2011. The bonds had a face value of $200,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Herman uses the straight-line method of amortization.
What is the amount of interest Herman must pay the bondholders in 2011?
a.$15,080
b.$16,000
c.$17,150
d.$14,850
a161.Herman Company received proceeds of $188,500 on 10-year, 8% bonds issued on January 1, 2011. The bonds had a face value of $200,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Herman uses the straight-line method of amortization.
What is the amount of interest expense Herman will show with relation to these bonds for the year ended December 31, 2012?
a.$16,000
b.$15,080
c.$17,150
d.$14,850
a162.Herman Company received proceeds of $188,500 on 10-year, 8% bonds issued on January 1, 2010. The bonds had a face value of $200,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Herman uses the straight-line method of amortization.
What is the carrying value of the bonds on January 1, 2012?
a.$200,000
b.$190,800
c.$197,700
d.$189,650
163.Herman Company received proceeds of $188,500 on 10-year, 8% bonds issued on January 1, 2010. The bonds had a face value of $200,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Herman uses the straight-line method of amortization.
Herman Company decided to redeem the bonds on January 1, 2012. What amount of gain or loss would Herman report on its 2012 income statement?
a.$9,200 gain
b.$11,200 gain
c.$11,200 loss
d.$9,200 loss
164.Bryce Company has $1,500,000 of bonds outstanding. The unamortized premium is $21,600. If the company redeemed the bonds at 101, what would be the gain or loss on the redemption?
a.$6,600 gain
b.$6,600 loss
c.$15,000 gain
d.$15,000 loss
165.The current carrying value of Kruger’s $800,000 face value bonds is $797,000. If the bonds are retired at 102, what would be the amount Kruger would pay its bondholders?
a.$797,000
b.$800,000
c.$804,000
d.$816,000