MC Qu. 111 On January 1 of Year...
On January 1 of Year 1, Congo Express Airways issued $2,700,000of 6% bonds that pay interest semiannually on January 1 and July 1.The bond issue price is $2,450,000 and the market rate of interestfor similar bonds is 7%. The bond premium or discount is beingamortized at a rate of $8,333 every six months. After accruinginterest at year end, the company's December 31, Year 1 balancesheet should reflect total liabilities associated with the bondissue in the amount of:
Multiple Choice:
$2,547,666.
$3,014,334.
$2,385,666.
$2,466,666.
$2,933,334.
MC Qu. 112 On January 1 of Year...
On January 1 of Year 1, Congo Express Airways issued $2,700,000of 7% bonds that pay interest semiannually on January 1 and July 1.The bond issue price is $2,470,000 and the market rate of interestfor similar bonds is 8%. The bond premium or discount is beingamortized at a rate of $7,667 every six months. The amount ofinterest expense recognized by Congo Express Airways on the bondissue in Year 1 would be:
Multiple Choice:
$216,000.
$189,000.
$102,167.
$173,666.
$204,334.
