Purchase Solution

Bonds

Not what you're looking for?

Ask Custom Question

A corporation issues $100,000, 8%, 5-year bonds on January 1, 2007, for $104,200. Interest is paid semiannually on January 1 and July 1. If the corporation uses the straight-line method of amortization of bond discount, the amount of bond interest expense to be recognized on July 1, 2007, is _______.

$8,420
$4,420
$4,000
$3,580

The Mansur Company issued $100,000 of 12% bonds on May 1, 2007 at face value. The bonds pay interest semiannually on January 1 and July 1. The bonds are dated January 1, 2007, and mature on January 1, 2011. The total interest expense related to these bonds for the year ended December 31, 2007 is

$2,000
$4,000
$8,000
$12,000

Purchase this Solution
Solution Summary

This solution is comprised of a detailed explanation to answer the amount of bond interest expense to be recognized on July 1, 2007 and total interest expense for Mansur Company.

Solution Preview

A corporation issues $100,000, 8%, 5-year bonds on January 1, 2007, for $104,200. Interest is paid semiannually on January 1 and July 1. If the corporation uses the straight-line method of amortization of bond discount, the amount of bond interest expense to be recognized on July 1, 2007, is ...

Purchase this Solution
Free BrainMass Quizzes
SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

View More Free Quizzes
Related BrainMass Solutions

  • The expected rate to issue new bonds

    YTM on BBB bonds = 11.5% Long-term risk-free government bonds = 8.7% Risk premium on BBB bonds = 11.5%-8.7%=2.8% Current risk premium = 50%*2.8%=1.4% Current long-term risk-free government bonds = 7.8% Current YTM on BBB bonds = 7.8%+1.4%=9.2%

  • Municipal bonds

    The default risk on municipal bonds exceeds that on treasury bonds. C. The liquidity of municipal bonds exceeds that of treasury bonds. D. Default-free treasury bonds include more income tax breaks relative to municipal bonds. A.

  • Bonds Payable

    139576 Bonds Payable 23.

  • Straight Line Method and Bond Terminology

    Listed below are common terms associated with bonds: a. Bond certificate b. Bond issue c. Bond indenture d. Unsecured bonds e. Debenture bonds f. Secured bonds g. Term bonds h. Serial bonds i. Registered bonds Required 1.

  • Convertible bonds and stock warrants

    Since the bonds are convertible bonds, there is no relevance of the price if the bonds were not convertible. 3.

  • Bond Valuation

    The current-risk premium on BBB bonds versus government bonds is half of what it was two years ago. If the risk-free long-term government bonds are currently yielding 7.8%, then at what rate should Rollincoast expect to issue new bonds?

  • Entries to Record Issuance of Bonds, Interest Accrual, and Bonds

    111435 Prepare entries to record issuance of bonds, interest accrual, and bond redemption Hornung Electric sold $300,000, 10%, 10 yr bonds on Jan. 1, 2006. The bonds were dated Jan. 1 and paid interest on Jan 1 and July 1.

  • Using Straight-Line Amortization to Compute the Gain/Loss

    Since bonds are purchased on discount, the discount would be amortized over the life of the bond Face Value of Bonds $3,000,000 Purchase Value of Bonds $2,946,000 Discount on Bonds $54,000 We are using straight

  • Southeast Airlines Bonds

    Liabilities Long-term debt (bonds) 400,000 Accrued interest on Bonds 36,000 Premium on Bonds payable 18,000 Interest payable 18,000 (c) On January 1, 2007 when the carrying value of the bonds was $416,000 the company redeemed the bonds

  • Corporate vs. government bonds

    However, it is also noteworthy that government bonds usually have a lower return than corporate bonds and in most cases government bonds are considered less risky. Further, many government bonds are partially to fully tax exempt. 2.

View More Related Solutions