Name: __________________________ ACG 302 Quiz Chapter 14 Spring 2012 1. If bonds are issued initially at a premium and the effective-interest method of amortization is used, interest expense in the earlier years will be A) greater than if the straight-line method were used. B) greater than the amount of the interest payments. C) the same as if the straight-line method were used. D) less than if the straight-line method were used. 2. If bonds are issued between interest dates, the entry on the books of the issuing corporation could include a A) debit to Interest Payable. B) credit to Interest Receivable. C) credit to Interest Expense. D) credit to Unearned Interest. 3. On January 1, 2012, Ellison Co. issued eight-year bonds with a face value of $2,000,000 and a stated interest rate of 6%, payable semiannually on June 30 and December 31. The bonds were sold to yield 8%. Table values are: Present value of 1 for 8 periods at 6% Present value of 1 for 8 periods at 8% Present value of 1 for 16 periods at 3%
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