Question 5 (3 points)Liz Lemon Corporation authorized and issued 40-year, $10 million, 5% bonds on...
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Question 5 (3 points)Liz Lemon Corporation authorized and issued 40-year, $10 million, 5% bonds on July 1, 2023. The bonds pay cash interest semiannually each June 30 and December 31 and were issued to yield 6.5%. Liz Lemon paid $20,000 to have bond certificates printed; $100,000 in legal fees; and $10,000 to a CPA for registration services. How will these debt issue costs affect the accounting for this bond issue on July 1, 2023?Liz Lemon will increase the Premium on bonds payable account by $130,000, which increases the effective market rate Liz Lemon will recognize Debt issue expense of $130,000 on July 1, 2023 The debt issue costs will have no effect on the company's financial statementsLiz Lemon will increase the Discount on bonds payable account by $130,000, which increases the effective market rateSubmit Quiz0 of 5 questions saved
Question 5 (3 points)Liz Lemon Corporation authorized and issued 40-year, $10 million, 5% bonds on July 1, 2023. The bonds pay cash interest semiannually each June 30 and December 31 and were issued to yield 6.5%. Liz Lemon paid $20,000 to have bond certificates printed; $100,000 in legal fees; and $10,000 to a CPA for registration services. How will these debt issue costs affect the accounting for this bond issue on July 1, 2023?Liz Lemon will increase the Premium on bonds payable account by $130,000, which increases the effective market rate Liz Lemon will recognize Debt issue expense of $130,000 on July 1, 2023 The debt issue costs will have no effect on the company's financial statementsLiz Lemon will increase the Discount on bonds payable account by $130,000, which increases the effective market rateSubmit Quiz0 of 5 questions saved
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