Chapter 14 LONG-TERM LIABILITIES

Chapter 14 LONG-TERM LIABILITIES - (Source: Intermediate...

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(Source: Intermediate Accounting , 12 th Edition; Keiso, Weygandt, Warfield) Chapter 14: LONG-TERM LIABILITIES 1. On July 1, 2007, Pryce Co. issued 1,000 of its 10%, $1,000 bonds at 99 plus accrued interest. The bonds are dated April 1, 2007 and mature on April 1, 2017. Interest is payable semiannually on April 1 and October 1. What amount did Pryce receive from the bond issuance? a. $1,015,000 b. $1,000,000 c. $990,000 d. $965,000 2. On January 1, 2007, Gomez Co. issued its 10% bonds in the face amount of $3,000,000, which mature on January 1, 2017. The bonds were issued for $3,405,000 to yield 8%, resulting in bond premium of $405,000. Gomez uses the effective-interest method of amortizing bond premium. Interest is payable annually on December 31 . At December 31 , 2007, Gomez's adjusted unamortized bond premium should be a. $405,000. b. $377,400. c. $364,500. d. $304,500. 3. On July 1, 2005, Kitel, Inc. issued 9% bonds in the face amount of $5,000,000, which mature on July 1, 2015. The bonds were issued for $4,695,000 to yield 10%, resulting in a bond discount of $305,000. Kitel uses the effective-interest method of amortizing bond discount. Interest is payable annually on June 30. At June 30, 2007, Kitel's unamortized bond discount should be a. $264,050. b. $255,000.
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Chapter 14 LONG-TERM LIABILITIES - (Source: Intermediate...

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