accounting exam 2024/2025 with 100% correct answers
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Course
Accounting exa
Institution
Accounting Exa
Brownlee Company issued $525,000, 8%, six-year bonds for 110, with interest paid annually. Assuming straight-line amortization, what is the carrying value of the bonds after one year?
A. $573,125
B. $577,500
C. $586,250
D. $568,750 correct answersD
A bond with a face value of $250,000 and ...
Brownlee Company issued $525,000, 8%, six-year bonds for 110, with interest paid annually. Assuming
straight-line amortization, what is the carrying value of the bonds after one year?
A. $573,125
B. $577,500
C. $586,250
D. $568,750 correct answersD
A bond with a face value of $250,000 and a quoted price of 98 has a selling price of
A. $250,098
B. $245,000
C. $255,102
D. $250,000 correct answersB
Mission Furniture issued $500,000 in bonds payable at par. The journal entry to record a semiannual
interest payment on these bonds would
A. debit cash and credit interest payable
B. debit cash and credit interest expense
C. debit interest expense and credit bonds payable
D. debit interest expense and credit cash correct answersD
Bonds with an 8% stated interest rate were issued when the market rate of interest was 5%. This bond
was issued at
A. face value
B. par value
C. a premium
D. a discount correct answersC
, Brimfest Corperation issued $2,400,000, 10-year, 6% bonds for $2,352,000 on January 1, 2019. Interest is
paid semiannually on January 1 and July 1. The corporation uses the straight-line method of
amortization. Brimfest's fiscal year ends on December 31. The amount of discount amortization on July
1, 2019, would be
A. $2,400
B. $4,800
C. $48,000
D. $144,000 correct answersA
The Discount on bonds payable account
A. is an expense account
B. is a contra account to bonds payable
C. is expensed at the bond's maturity
D. is a miscellaneous revenue account correct answersB
The discount on a bond payable becomes
A. additional interest expense in the year the bonds are sold
B. a reduction of interest expense in the year the bonds mature
C. a reduction in interest expense over the life of the bonds
D. additional interest expense over the life of the bonds correct answersD
the carrying value of bonds payable equals
A. bonds payable plus discount on bonds payable
B. bonds payable minus discount on bonds payable
C. bonds payable minus premium on bonds payable
D. bonds payable plus accrued interest correct answersB
if bonds are issued at a discount and the effective-interest method is used, the amount of interest
expense
A. remains the same over the term of the bonds
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