Answer the following statements true (T) or false (F)
1. On July 1, 2018, Jordie Equipment Dealer issued $600,000 of 9% bonds payable that mature in seven years. These bonds were issued at face value and pay interest each June 30 and December 31. Each semiannual interest payment is $27,000.
2. On July 1, 2018, Shannon Equipment Dealer issued $590,000 of 6% bonds payable that mature in seven years. These bonds were issued at face value and pay interest each June 30 and December 31. Each semiannual interest payment will be higher than the interest expense.
3. The balance in the Bonds Payable account is a credit of $67,000. The balance in the Discount on Bonds Payable account is a debit of $2,650. The bond's carrying amount is $64,350.
4. The balance in the Bonds Payable account is a credit of $77,000. The balance in the Discount on Bonds Payable is a debit of $3,600. The balance sheet will report the bond balance as $80,600.
5. Discount on Bonds Payable is additional Interest Expense of the company that issues the bond.
1. TRUE
2. FALSE
3. TRUE
4. FALSE
5. TRUE
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