81. Bonds that give the issuer an option of retiring them prior to the date of maturity are:
A. Debentures
B. Serial bonds
C. Sinking fund bonds
D. Registered bonds
E. Callable bonds
82. A company has bonds outstanding with a par value of $100,000. The unamortized discount on these bonds is $4,500. The company retired these bonds by buying them on the open market at 97. What is the gain or loss on this retirement?
A. $0 gain or loss
B. $1,500 gain
C. $1,500 loss
D. $3,000 gain
E. $3,000 loss
83. A company has bonds outstanding with a par value of $600,000. The unamortized discount on these bonds is $3,000. The company retired these bonds by buying them on the open market at 98. What is the gain or loss on this retirement?
A. $0 gain or loss
B. $9,000 gain
C. $9,000 loss
D. $14,500 gain
E. $14,500 loss
84. A company has bonds outstanding with a par value of $400,000. The unamortized premium on these bonds is $2,000. The company retired these bonds by buying them on the open market at 97. What is the gain or loss on this retirement?
A. $0 gain or loss
B. $10,000 gain
C. $10,000 loss
D. $14,000 gain
E. $14,000 loss
85. A company has bonds outstanding with a par value of $100,000. The unamortized premium on these bonds is $2,700. If the company retired these bonds at a call price of 99, the gain or loss on this retirement is:
A. $1,000 gain
B. $1,000 loss
C. $2,700 loss
D. $2,700 gain
E. $3,700 gain
86. A company retires its bonds at 105. The carrying value of the bonds at the date of is $103,745. The issuer's journal entry to record the retirement will include a:
A. Debit to Premium on Bonds.
B. Credit to Premium on Bonds.
C. Debit to Discount on Bonds.
D. Credit to Gain on Bond Retirement.
E. Credit to Bonds Payable.
87. A corporation issued 8% bonds with a par value of $1,000,000, receiving a $20,000 premium. On the interest date five years later, after the bond interest was paid and after 40% of the premium had been written off, the corporation purchased the entire issue on the open market at 99 and retired it. The gain or loss on this retirement is:
A. $0
B. $10,000 gain
C. $10,000 loss
D. $22,000 gain
E. $22,000 loss
88. On October 1, a $30,000, 6%, three-year installment note payable is issued by a company. The note requires that $10,000 of principal plus accrued interest be paid at the end of each year on September 30. The issuer's journal entry to record the second annual interest payment would include:
A. A debit to Interest Expense for $1,800.
B. A debit to Interest Expense for $1,200.
C. A credit to Cash for $11,800.
D. A credit to Cash for $10,000.
E. A debit to Notes Payable for $1,200.
89. A corporation borrowed $125,000 cash by signing a five-year, 9% installment note requiring annual payments each December 31 of accrued interest plus equal amounts of principal. What journal entry would the issuer record for the first payment?
A.
Interest Expense
|
2,250
|
|
Notes Payable
|
25,000
|
|
Cash
|
|
27,250
|
B.
Notes Payable
|
27,250
|
|
Interest Payable
|
|
2,250
|
Cash
|
|
25,000
|
C.
Interest Expense
|
11,250
|
|
Notes Payable
|
25,000
|
|
Cash
|
|
36,250
|
D.
Notes Payable
|
25,000
|
|
Cash
|
|
25,000
|
E.
Notes Payable
|
11,250
|
|
Cash
|
|
11,250
|
90. On January 1, 2013, Merrill Company borrowed $100,000 on a 10-year, 7% installment note payable. The terms of the note require Merrill to pay 10 equal payments of $14,238 each December 31 for 10 years. The required general journal entry to record the first payment on the note on December 31, 2013 is:
A.
Notes Payable
|
7,238
|
|
Interest expense
|
7,000
|
|
Cash
|
|
14,238
|
B.
Notes Payable
|
7,000
|
|
Interest expense
|
7,238
|
|
Cash
|
|
14,238
|
C.
Notes Payable
|
10,000
|
|
Interest expense
|
7,000
|
|
Cash
|
|
17,000
|
D.
Notes Payable
|
14,238
|
|
Cash
|
|
14,238
|
E.
Notes Payable
|
10,000
|
|
Interest expense
|
4,238
|
|
Cash
|
|
14,238
|