# On January 1, Elias Corporation issued 6% bonds with a face value of \$94,000. The bonds...

On January 1, Elias Corporation issued 6% bonds with a face value of \$94,000. The bonds are sold for \$91,180. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, 10 years from now. Elias records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 of the first year is a. \$470 b. \$2,820 c. \$5,640 d. \$5,922

Bonds Payable has a balance of \$946,000 and Premium on Bonds Payable has a balance of \$10,406. If the issuing corporation redeems the bonds at 103, what is the amount of gain or loss on redemption?

a.\$17,974 loss

b.\$10,406 gain

c.\$10,406 loss

d.\$974,380 gain

On the first day of the fiscal year, a company issues an \$689,000, 9%, five-year bond that pays semiannual interest of \$31,005 (\$689,000 x 9% x 1/2), receiving cash of \$647,700. Journalize the entry to record the first interest payment and the amortization of the related bond discount using the straight-line method.

If an amount box does not require an entry, leave it blank.

1. Calculation of bond interest expense:

​Interest expense=\$94000*6%=\$5640

Amortization expense=(\$94000-\$91180)/10=\$282

Total interest expense=\$5922

Correct option is D.

* First question has been answered as per Chegg's policy.

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