43) The Cases Company issues $800,000 of 7%, 10-year bonds on March 31, 2013. The bond pays interest on March 31 and September 30. Which of the following statements is TRUE?
A) If the market rate of interest is 8%, the bonds will issue at a premium.
B) If the market rate of interest is 8%, the bonds will issue at a discount.
C) If the market rate of interest is 8%, the bonds will issue at par.
D) If the market rate of interest is 8%, the bonds will issue above par.
44) Blanding Company issues $1,000,000 of 8%, 10-year bonds at 98 on February 28, 2014. The bond pays interest on February 28 and August 31. The market rate of interest on the issuance date was 10%. On August 31, 2014, how much cash did Blanding pay out to bondholders?
A) $41,000
B) $40,000
C) $80,000
D) $39,000
45) The Amazing Widget Company issues $500,000 of 6%, 10-year bonds at 103 on March 31, 2014. The bond pays interest on March 31 and September 30. The market rate of interest on the issuance date was 4%. On September 30, 2014, how much cash did the company pay out to bondholders?
A) $14,250
B) $30,000
C) $15,000
D) $7,500
46) On January 2, 2014, Mahoney Sales issued $10,000 in bonds for $9,400. They were 5-year bonds with a stated rate of 4%, and pay semiannual interest payments. Mahoney Sales uses the straight-line method to amortize bond discount. Please provide the journal entry for the first interest payment.
47) On January 1, 2013, Davie Services issued $20,000 of 8% bonds that mature in five years. They were issued at par–for the same amount as the face value. Please provide the journal entry to issue the bonds.
48) On January 1, 2014, Davie Services issued $20,000 of 8% bonds that mature in five years. They were sold at discount, for a total of $19,000. Please provide the journal entry to issue the bonds.