Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 9, Problem 7QC
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.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
When bonds are issued at a premium, what happens to the carrying value and interest expense each period over the life of the bonds? a. Carrying value and interest expense increase.b. Carrying value and interest expense decrease.c. Carrying value decreases and interest expense increases.d. Carrying value increases and interest expense decreases.
When bonds are acquired between interest payment dates, the price paid for the bond is:
a. equal to the acquisition cost.
b.increased by a charge for accrued interest to the date of purchase.
c.decreased by a credit for accrued interest to the date of purchase.
d.equal to the par value increased by a charge for accrued interest to the date of purchase.
When bonds are issued at a premium and the effective interest method is used for amortization, at each subsequent interest payment date, the cash paid is:
Select one:
a. Less than the interest expense
b. Equal to the interest expense
c. Greater than the interest expense
d. More than if the bonds had been sold at a discount
e. Less than if the bonds had been sold at a discount
Chapter 9 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. 9 - Brownlee Company issued 525,000, 8%, six-year...Ch. 9 - A bond with a face value of 250,000 and a quoted...Ch. 9 - Mission Furniture issued 500,000 in bonds payable...Ch. 9 - Bonds with an 8% stated interest rate were issued...Ch. 9 - Brimfest Corporation issued 2,400,000, 10-year, 6%...Ch. 9 - The Discount on Bonds Payable account a.is an...Ch. 9 - The discount on a bond payable becomes...Ch. 9 - The carrying value of Bonds Payable equals a.Bonds...Ch. 9 - Prob. 9QCCh. 9 - Prob. 10QC
Ch. 9 - Prob. 11QCCh. 9 - When a company retires bonds early, the gain or...Ch. 9 - Which type of lease will not increase a companys...Ch. 9 - Prob. 14QCCh. 9 - The debt ratio is calculated by dividing: a. total...Ch. 9 - Prob. 16QCCh. 9 - Prob. 17QCCh. 9 - Prob. 9.1ECCh. 9 - Prob. 9.1SCh. 9 - (Learning Objective 1: Determine bond prices at...Ch. 9 - (Learning Objective 1: Journalize basic bond...Ch. 9 - Prob. 9.4SCh. 9 - Prob. 9.5SCh. 9 - Prob. 9.6SCh. 9 - Prob. 9.7SCh. 9 - Prob. 9.8SCh. 9 - (Learning Objective 2: Account for bonds payable...Ch. 9 - Prob. 9.10SCh. 9 - LO 4,5 (Learning Objectives 4, 5: Deferred income...Ch. 9 - LO 5 (Learning Objective 5: Compute and evaluate...Ch. 9 - LO 5 (Learning Objective 5: Calculate the leverage...Ch. 9 - LO 6 (Learning Objective 6: Report liabilities)...Ch. 9 - (Learning Objective 1: Issue bonds payable...Ch. 9 - Prob. 9.16AECh. 9 - Prob. 9.17AECh. 9 - LO 2 (Learning Objective 2: Issue bonds payable...Ch. 9 - Prob. 9.19AECh. 9 - LO 4 (Learning Objective 4: Account for deferred...Ch. 9 - (Learning Objective 5: Evaluate debt-paying...Ch. 9 - LO 4, 5 (Learning Objectives 4, 5: Analyze current...Ch. 9 - Prob. 9.23AECh. 9 - (Learning Objective 1: Issue bonds payable...Ch. 9 - Prob. 9.25BECh. 9 - Prob. 9.26BECh. 9 - Prob. 9.27BECh. 9 - Prob. 9.28BECh. 9 - LO 4 (Learning Objective 4: Account for deferred...Ch. 9 - Prob. 9.30BECh. 9 - Prob. 9.31BECh. 9 - Prob. 9.32BECh. 9 - A bond with a face amount of 12,000 has a current...Ch. 9 - The carrying value on bonds equals Bends Payable...Ch. 9 - Prob. 9.35QCh. 9 - Prob. 9.36QCh. 9 - Prob. 9.37QCh. 9 - Prob. 9.38QCh. 9 - Prob. 9.39QCh. 9 - Prob. 9.40QCh. 9 - Prob. 9.41QCh. 9 - Prob. 9.42QCh. 9 - Prob. 9.43QCh. 9 - Prob. 9.44QCh. 9 - Prob. 9.45QCh. 9 - Prob. 9.46QCh. 9 - Prob. 9.47QCh. 9 - Prob. 9.48QCh. 9 - Prob. 9.49QCh. 9 - Prob. 9.50APCh. 9 - (Learning Objectives 1, 6: Issue bonds at a...Ch. 9 - Prob. 9.52APCh. 9 - Prob. 9.53APCh. 9 - (Learning Objectives 2, 3, 6: Issue convertible...Ch. 9 - Prob. 9.55APCh. 9 - Prob. 9.56BPCh. 9 - Prob. 9.57BPCh. 9 - Prob. 9.58BPCh. 9 - Prob. 9.59BPCh. 9 - (Learning Objectives 2, 3, 6: Issue convertible...Ch. 9 - (Learning Objectives 4, 5, 6: Report liabilities...Ch. 9 - Prob. 9.62CEPCh. 9 - Prob. 9.63CEPCh. 9 - Prob. 9.64SCCh. 9 - (Learning Objective 5: Explore an actual...Ch. 9 - Prob. 1FF
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The premium on bonds payable account is shown on the balance sheet as A contra asset. A reduction of an expense. An addition to a long-term liability. A subtraction from a long-term liability.arrow_forwardThe principal of a bond is ________. A. the person who sold the bond for the company B. the person who bought the bond C. the interest rate printed on the front of the bond D. the face amount of the bond that will be paid back at maturityarrow_forwardThe discount on a bond payable becomesa. 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.arrow_forward
- The discount on bonds payable is charged to interest expense a.Using the effective interest method b.Only in the year the bond matures c.Equally over the life of the bond d.only in the year the bond is issuedarrow_forwardWhen bonds are issued at a discount and the effective interest method is used for amortization, at each successive interest payment date, the interest expense: Select one: a. Increases b. Is equal to the change in market value of the bonds c. Decreases d. Is equal to the change in carrying value of the bonds e. Stays the samearrow_forwardWhen bonds are issued at a premium and the effective interest method is used for amortization, at each successive interest payment date, the interest expense: Select one: a. Is equal to the change in market value of the bonds b. Decreases c. Stays the same d. Increases e. Is equal to the change in carrying value of the bondsarrow_forward
- The amortization of a premium on bonds payable a. Increase the amount of interest expense reported b. Increases the cash payment to bondholders c. Decreases the carrying amount of the bonds payable d. Decrease the balance of bonds payablearrow_forward2. Bond issue costs, such as printing fees, legal fees, commissions, etc. are most appropriately accounted for by: a. charging them to an expense account in the year the bonds are actually sold. b. debiting them to unamortized bond issue costs, setting them as a deferred charge on the statement of financial position, and amortizing them in a manner similar to bond discount over the life of the bond. c. charging them to an expense account in the year the bonds are originally dated whether or not they are sold in that year. d. considering them in the measurement of the bonds payable.arrow_forwardThe interest expense recorded on an interest payment date is increased a.by the amortization of premium on bonds payable b.only if the market rate of interest is less than the stated rate of interest on that date c.only if the bonds were sold at face value d.by the amortization of discount on bonds payablearrow_forward
- When the effective-interest method is used, the amount of bond discount amortized eachinterest period is equal to thea. amount of interest expense less the cash paid for interest.b. amount of interest expense plus the cash paid for interest.c. face value of the bond times the market interest rate at the date of issue.d. face value of the bond times the stated interest rate.arrow_forwardIf bonds are issued at a discount and the effective-interest method is used, the amount ofinterest expensea. remains the same over the term of the bonds.b. is less than the cash interest payment.c. increases each period as the bonds approach maturity.d. decreases each period as the bonds approach maturityarrow_forwardWhen bonds are issued at a discount, the interest expense for the period is A. The amount of interest payment for the period minus the discount amortization for the period B. The amount of interest payment for the period plus the discount amortization for the period. C. The amount of interest payment for the period minus the premium amortization for the period D. The amount of interest payment for the period plus the premium amortization for the period.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Financial Accounting - Long-term Liabilities - Bonds; Author: Finance & Accounting Videos by Prof Coram;https://www.youtube.com/watch?v=_1fwsJIGMos;License: Standard Youtube License