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10. A company issued 8%, 15-year bonds with a par value of $550,000 that pay...

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Accounting

10. A company issued 8%, 15-year bonds with a par value of $550,000 that pay interest semiannually. The market rate on the date of issuance was 8%. The journal entry to record each semiannual interest payment is: Multiple Choice Debit Bond Interest Expense $22,000; credit Cash $22,000. Debit Bond Interest Expense $44,000; credit Cash $44,000. Debit Bond Interest Payable $22,000; credit Cash $22,000. Debit Bond Interest Expense $550,000; credit Cash $550,000. No entry is needed, since no interest is paid until the bond is due.

11. A bondholder that owns a $1,000, 10%, 10-year bond has:

Multiple Choice

Ownership rights in the issuing company.

The right to receive $10 semiannually until maturity.

The right to receive $1,000 at maturity.

12. A company issued 10-year, 7% bonds with a par value of $100,000. The company received $96,526 for the bonds. Using the straight-line method, the amount of interest expense for the first semiannual interest period is:

Multiple Choice

$3,326.00.

$3,500.00.

$3,673.70.

$7,000.00.

$7,347.40.

The right to receive $10,000 at maturity.

The right to receive dividends of $1,000 per year.

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