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Question;86. Beonce;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. Beonce uses the;straight-line method of amortization.;Beonce Company decided to redeem the bonds on January 1, 2013. What amount of gain or loss would Beonce report;on its 2013 income statement?;a. $9,200;gain;b. $11,200;gain;c. $11,200;loss;d. $9,200;loss;87. Bargain Company has $1,600,000 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. $5,600;gain;b. $5,600;loss;c. $16,000;gain;d. $16,000;loss;88. The current carrying value of Kane?s $900,000;face value bonds is $897,000. If the bonds are retired at 103, what would be;the amount Kane would pay its bondholders?;a. $897,000;b. $900,000;c. $906,000;d. $927,000;89. Lark Corporation retires its $800,000 face;value bonds at 105 on January 1, following the payment of annual interest. The carrying value of the bonds at the;redemption date is $829,960. The entry;to record the redemption will include a;a. credit;of $10,040 to Loss on Bond Redemption.;b. debit;of $10,040 to Loss on Bond Redemption.;c. credit;of $10,040 to Premium on Bonds Payable.;d. debit;of $40,000 to Premium on Bonds Payable.;90. A $600,000 bond was retired at 103 when the;carrying value of the bond was $622,000. The entry to record the retirement;would include a;a. gain on bond redemption of $18,000.;b. loss on bond redemption of $12,000.;c. loss on bond redemption of $18,000.;d. gain on bond redemption of $4,000.;91. If sixty $1,000 convertible bonds with a;carrying value of $69,000 are converted into 9,000 shares of $5 par value;common stock, the journal entry to record the conversion is;a. Bonds;Payable...................................................................... 69,000;Common;Stock........................................................... 69,000;b. Bonds;Payable...................................................................... 60,000;Premium;on Bonds Payable................................................. 9,000;Common;Stock........................................................... 69,000;c. Bonds;Payable...................................................................... 60,000;Premium;on Bonds Payable................................................. 9,000;Common;Stock........................................................... 45,000;Paid-in;Capital in Excess of Par.................................. 24,000;d. Bonds;Payable...................................................................... 69,000;Discount;on Bonds Payable........................................ 9,000;Common;Stock........................................................... 45,000;Paid-in;Capital in Excess of Par.................................. 15,000;92. A corporation;recognizes a gain or loss;a. only;when bonds are converted into common stock.;b. only;when bonds are redeemed before maturity.;c. when;bonds are redeemed at or before maturity.;d. when bonds are converted into;common stock and when they are redeemed before maturity.;93. If there is a loss on bonds redeemed early;it is;a. debited directly to Retained Earnings.;b. reported as an "Other Expense" on;the income statement.;c. reported as an "Extraordinary Item;on the income statement.;d. debited to Interest Expense, as a cost of;financing.;94. If bonds can be converted into common;stock;a. they will sell at a lower price than;comparable bonds without a conversion feature.;b. they will carry a higher interest rate than;comparable bonds without the conversion feature.;c. they will be converted only if the issuer;calls them in for conversion.;d. the bondholder may benefit if the market;price of the common stock increases substantially.;95. When bonds are converted into common stock;a. the market price of the stock on the date of;conversion is credited to the Common Stock account.;b. the market price of the bonds on the date of;conversion is credited to the Common Stock account.;c. the market price of the stock and the bonds;is ignored when recording the conversion.;d. gains or losses on the conversion are;recognized.;96. If bonds with a face value of $150,000 are;converted into common stock when the carrying value of the bonds is $135,000;the entry to record the conversion will include a debit to;a. Bonds Payable for $150,000.;b. Bonds Payable for $135,000.;c. Discount on Bonds Payable for $15,000.;d. Bonds Payable equal to the market price of;the bonds on the date of conversion.;97. A $600,000 bond was retired at 98 when the;carrying value of the bond was $592,000. The entry to record the retirement;would include a;a. gain on bond redemption of $8,000.;b. loss on bond redemption of $8,000.;c. loss on bond redemption of $4,000.;d. gain on bond redemption of $4,000.;98. Thirty $1,000 bonds with a carrying value;of $39,600 are converted into 3,000 shares of $5 par value common stock. The;common stock had a market value of $9 per share on the date of conversion. The;entry to record the conversion is;a. Bonds;Payable...................................................................... 39,600;Common;Stock........................................................... 15,000;Paid-in;Capital in Excess of Par................................... 24,600;b. Bonds;Payable...................................................................... 30,000;Premium;on Bonds Payable................................................. 9,600;Common;Stock........................................................... 27,000;Paid-in;Capital in Excess of Par.................................. 12,600;c. Bonds;Payable...................................................................... 30,000;Premium;on Bonds Payable................................................. 9,600;Common;Stock........................................................... 15,000;Paid-in;Capital in Excess of Par................................... 24,600;d. Bonds;Payable...................................................................... 39,600;Common;Stock........................................................... 27,000;Paid-in;Capital in Excess of Par................................... 12,600;99. Which one of the;following amounts increases each period when accounting for long-term notes;payable?;a. Cash;payment;b. Interest;expense;c. Principal;balance;d. Reduction of principal;100. In the balance sheet, mortgage notes;payable are reported as;a. a current liability only.;b. a long-term liability only.;c. both a current and a long-term liability.;d. a current liability except for the reduction;in principal amount.

 

Paper#44937 | Written in 18-Jul-2015

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