January 1 Year 1, Gordon Corporation issued bonds with a face value of $70,000, a stated rate of interest of 6%, and a 5-year term to maturity. The bonds were issued each year. Gordon uses the straight-line method to amortize bond discounts and premiums. hich of the following shows the effect of the bond issuance on the financial statements? Balance Sheet Assets = Liabilities + . 70,000 . . . 68,600 68,600 70,000 Multiple Choice 70,000 68,600 70,000 68,600 Option D Stockholders' Equity n/a n/a (1,400) 1,400 Revenue n/a n/a n/a n/a Income Statement Expense = Net Income n/a n/a 1,400 (1,400) n/a n/a (1,400) 1,400 Statement of Cash Flows 70,000 FA 68,600 FA 68,600 FA 70,000 FA

January 1 Year 1, Gordon Corporation issued bonds with a face value of $70,000, a stated rate of interest of 6%, and a 5-year term to maturity. The bonds were issued each year. Gordon uses the straight-line method to amortize bond discounts and premiums. hich of the following shows the effect of the bond issuance on the financial statements? Balance Sheet Assets = Liabilities + . 70,000 . . . 68,600 68,600 70,000 Multiple Choice 70,000 68,600 70,000 68,600 Option D Stockholders' Equity n/a n/a (1,400) 1,400 Revenue n/a n/a n/a n/a Income Statement Expense = Net Income n/a n/a 1,400 (1,400) n/a n/a (1,400) 1,400 Statement of Cash Flows 70,000 FA 68,600 FA 68,600 FA 70,000 FA

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 6PA: Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...

See similar textbooks

Similar questions

On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market rate of 4%. The bonds paid interest semi-annually on June 30 and Dec. 31. How much money did the company receive when the bonds were issued? The bonds would be quoted at what rate?
On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $1,000 for $104,000. The bonds had a stated rate of 6% and paid interest semi-annually. What is the journal entry to record the first payment to the bondholders?
Medhurst Corporation issued $90,000 in bonds for $87,000. The bonds had a stated rate of 8% and pay interest quarterly. What is the journal entry to record the sale of the bonds?
Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018, and received $540,000. Interest is payable semi-annually. The premium is amortized using the straight-line method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. Dec. 31, 2018: entry to record payment of interest to bondholders C. Dec. 31, 2018: entry to record amortization of premium
Piedmont Corporation issued $200,000 of 10-year bonds at par. The bonds have a stated rate of 6% and pay interest annually. What is the journal entry to record the first interest payment to the bondholders?
Medhurst Corporation issued $90,000 in bonds for $87,000. The bonds had a stated rate of 8% and pay interest quarterly. What is the journal entry to record the first interest payment?
Willoughby Inc. issued 100 bonds with a face value of $1,000 and a stated rate of 4% and received $105,000. What is the journal entry to record the sale of the bonds?