help me fill in 497390

1. The contractual rate of interest is usually stated as a(n)Answer

2. 		monthly rate.
   		daily rate.
   		semiannual rate.
   		annual rate.

4 points

Question 2

1. A bond with a face value of $100,000 and a quoted price of 97 has a selling price of

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   Answer

   		$97,250.
   		$97,025.
   		$97,002.
   		$97,500.

4 points

Question 3

1. The contractual interest rate on a bond is often referred to as the:

   Answer

   		Callable rate.
   		the maturity rate.
   		market rate.
   		stated rate.

4 points

Question 4

1. If the market interest rate for a bond is higher than the stated interest rate, the bond will sell at:

   Answer

   		A premium.
   		A discount.
   		Par.
   		Both a and b correct.

4 points

Question 5

1. If the market rate of interest is 10%, a $10,000, 12%, 10-year bond that pays interest annually would sell at an amount

   Answer

   		less than face value.
   		equal to face value.
   		greater than face value.
   		that cannot be determined.

4 points

Question 6

1. If bonds are issued at a premium, the stated interest rate is

   Answer

   		higher than the market rate of interest.
   		lower than the market rate of interest.
   		too low to attract investors.
   		adjusted to a higher rate of interest.

4 points

Question 7

1. Gomez Corporation issues $500,000 10-year, 8% bonds dated January 1, 2010, at 96. The journal entry to record the issuance will show a

   Answer

   		debit to Cash of $500,000.
   		credit to Discount on Bonds Payable for $20,000.
   		debit to Bonds Payable for $480,000.
   		debit to Cash for $480,000.

4 points

Question 8

1. Molina Corporation issues 2,000, 10-year, 8%, $1,000 bonds dated January 1, 2010, at 103. The journal entry to record the issuance will show a

   Answer

   		debit to Cash of $2,000,000.
   		debit to Premium on Bonds Payable for $60,000.
   		credit to Bonds Payable for $2,060,000.
   		credit to Cash for $2,060,000.

   Short answer – fill in the blanks below.
   On December 31, 2005, Hanks Service Co. issued $300,000 face value, 9%, 5-year bonds for cash of $ 288,417, a price that yields 10%. Interest is to be paid annually.

   Compute the amount of interest Hanks Co. will pay to bondholders each year during the term of the bonds. ______________

   On January 2,1998, Lang Co. had issued $100,000 of 12% bonds to yield 10%. On January 2, 2000, the Premium on Bonds Payable account had a balance of $8,000. This account shows the unamortized amount of the premium.

   Determine the carrying value of the bonds 1/2/2000. ______________

   Determine the amount paid to bondholders at the maturity date of the bonds, January 2, 2008. ________________

   Please note – be sure to provide both amounts in your answer.