Greco Co issued ten-year term bonds on January 1, 20x5, with a face value of $1,600,000. The face interest rate is 6 percent and interest is payable semi-annually on June 30 and December 31. The bonds were issued for $1,381,920 to yield an effective annual rate of 8 percent. The effective interest method of amortization is to be used. How much bond interest expense (rounded to the nearest dollar)
should be reported on the income statement for the year ended December 31, 20x5?
A) $96,000
B) $110,844
C) $110,262
D) $110,552
B
You might also like to view...
The document that a company would issue to a customer for merchandise returned is called a(n)
a. sales allowance; b. credit memorandum; c. debit memorandum; d. allowance memorandum; e. credit allowance
Cirrus Inc purchased certain plant assets under a deferred payment contract. The agreement was to pay $40,000 per year for ten years. The plant assets should be valued at
a. $400,000. b. $400,000 plus imputed interest. c. present value of $40,000 annuity for ten years at an imputed interest rate. d. future value of $40,000 annuity for ten years at an imputed interest rate.
The cash change equation for preparing the statement of cash flows using a T-account work sheet is: Assets = Liabilities + Shareholders' Equity
Indicate whether the statement is true or false
Sparks Company entered into the following transactions involving short-term notes payable. On June 18, Sparks purchased $25,000 merchandise from EquipCo., terms 2/10, n/30. Sparks uses the perpetual inventory system. On July 19, Sparks replaced the June 18 account payable with a 60-day, $12,000 note bearing 4% annual interest in addition to paying $13,000 in cash. Sparks paid the amount due on the note at maturity.1. Determine the maturity date for the note.2. Prepare journal entries for all the preceding transactions and events.
What will be an ideal response?