On January 1, the Kings Corporation issued 10% bonds with a face value of $98,000. The bonds are sold for $96,040. The bonds

2 answers
Question:

On January 1, the Kings Corporation issued 10% bonds with a face value of $98,000. The bonds are sold for $96,040. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, ten years from now. Kings records straight-line amortization of the bond discount. Determine the bond interest expense for the year ended December 31 of the first year is. Select the correct answer. $9,800 $9,604 $9,996 $1,960

Answers

$9,996

Explanation:

The bond is issued on discount when the issuance price is lower than the face value of the bond. The discount on the bond will be expensed over the bond period until maturity.

Discount on Bond = Face value - Issuance value = $98,000 - $96,040 = $1,960

Interest Expense includes the interest payment and the discount amortization.

Discount amortization = Discount value / Life of the bond = $1,960 / 10 = 196 per year = $98 semiannually

Interest Payment = $98,000 x 10% = $9,800 annually = $4,900 semiannually

Interest Expense = ( 4,900 + 98 ) x 2 = $9,996

The correct answer is $9,800

Explanation:

Solution:

Recall that

Kings Corporation issued bonds of = 10%

Face value = $98,000

Bonds sold for = 96,040

Determine the bond interest expense for the year ended December 31 of the first year

Now,

$98,000 * 10 bond = 9,800

Therefore, the bond interest expense for the year ended December 31 of the first year is + $9,800

Similar Solved Works

3 answers

The management of fisheries and hatcheries, where fish eggs areincubated and hatched is known asO Aquatic BreedingO AquacultureO AquaponicsO Marine

The management of fisheries and hatcheries, where fish eggs are incubated and hatched is known as O Aquatic Breeding O Aquaculture O Aquaponics O Marine Hatching...
4 answers

Classify ABCD as a trapezoid, rectangle, parallelogram, or none of those. Show all work! A(2, -1), B(5,2), C(12,-5), D(9,-8)

Classify ABCD as a trapezoid, rectangle, parallelogram, or none of those. Show all work! A(2, -1), B(5,2), C(12,-5), D(9,-8)...
3 answers

Select the correct answer from each drop-down menu.Joanne purchased a new computer for $1,700. She will need to pay $80 each

Select the correct answer from each drop-down menu. Joanne purchased a new computer for $1,700. She will need to pay $80 each month, Interest free, to pay off the total price of the computer. She plans to put $150 each month in her savings account, which currently has a balance of $300. Create an a...
4 answers

Từ hệ tiên đề của hình học Ơclít dùng trong trường phổ thông. Hãy chứng minh định lí:Trong không

Từ hệ tiên đề của hình học Ơclít dùng trong trường phổ thông. Hãy chứng minh định lí: Trong không gian, qua một điểm không nằm trên đường thẳng cho trước. Có một và chỉ một đường thẳng song song với đường thẳng cho trước....
9 answers

In what way is artificial selection different from natural selection

In what way is artificial selection different from natural selection...
3 answers

Explain how the scientific theory of evolution is supported by observed evolutionary change

Explain how the scientific theory of evolution is supported by observed evolutionary change...
10 answers

The area of a square can be expressed by the polynomial expression 16x^4 -16x^2 +4. What is the polynomial expression for the

The area of a square can be expressed by the polynomial expression 16x^4 -16x^2 +4. What is the polynomial expression for the length of a side?...
5 answers

14. is 250% of 44 less than 100, greater than 100but less than 150, or greater than 1507 explainyour

14. is 250% of 44 less than 100, greater than 100but less than 150, or greater than 1507 explainyour reasoning.​...
10 answers

In the byzantine empire, who had the final say on church matters?

In the byzantine empire, who had the final say on church matters?...
4 answers

Write an explicit equation for the n- term of the geometric sequence with az = 14 and a common ratio of 2. an​

Write an explicit equation for the n- term of the geometric sequence with az = 14 and a common ratio of 2. an​...
10 answers

85 times 1/5 is the same as 85 divided by

85 times 1/5 is the same as 85 divided by...
10 answers

Listen to the audio and then answer the following question. Feel free to listen to the audio as many

Listen to the audio and then answer the following question. Feel free to listen to the audio as many times as necessary before answering the question. When is this conversation most likely taking place? (Audio given to you) A) por la mañana B) por la tarde C) por la noche D) al mediodía Please h...
3 answers

Eli buys 8 gigabytes of memory for his computer he spends 392. whatbis the cost of 1 gigabyte memory

Eli buys 8 gigabytes of memory for his computer he spends 392. whatbis the cost of 1 gigabyte memory...
3 answers

Convertir la fracción inadecuada en número mixto 29/4

Convertir la fracción inadecuada en número mixto 29/4...
3 answers

An object with a mass of 3.2kg has a force of 16.3 newtons to the right and 6.7 newtons to the left applied to it. What

An object with a mass of 3.2kg has a force of 16.3 newtons to the right and 6.7 newtons to the left applied to it. What is the resulting acceleration of the object?​...
10 answers

Homeostasis is a characteristic of all Iving things. Which of the following is a way that multicellular organisms can maintain homeostasis butunicelular

Homeostasis is a characteristic of all Iving things. Which of the following is a way that multicellular organisms can maintain homeostasis but unicelular organisms cannot? O A Multicellular organisms can respond to the environment. O B. The cells of multicellular organisms can grow and reproduce. O...
8 answers

AssociativeProperty

Associative Property...
2 answers

Which of the points shown below are on the line given by the equation y = 2x check all that apply a.

Which of the points shown below are on the line given by the equation y = 2x check all that apply a. point a: (1,2) b. point b: (-1,-2) c. point c: (4,2) d. point d : (0,2) need asap...
10 answers

What event in act v suggests that macbeth is so exhausted by murder and bloodshed that he is almost used to te pain of death

What event in act v suggests that macbeth is so exhausted by murder and bloodshed that he is almost used to te pain of death a) the appearance of banquos ghost at the banquet b) the news that lady macbeth has killed herself c) the sight of birnam wood approaching his castle d) the realization that m...
3 answers

What is 0.00002468 to the nearest hundrad thousandth as an estimate

What is 0.00002468 to the nearest hundrad thousandth as an estimate...

-- 0.055307--