Chapter 9 ch 9 1 on july 1 shady creek resort

CHAPTER 9

Ch 9 - #1. On July 1, Shady Creek Resort borrowed $250,000 cash by signing a 10-year, 6% installment note
requiring equal payments each month of $3,105. What amount of interest expense will be included in the first
annual payment?
Ch 9 - #2 . A corporation borrowed $125,000 cash by signing a 5-year, 9% installment note requiring equal
monthly payments of $2,678. What journal entry would the issuer record for the first payment? (round to
nearest $1)
Ch 9 - #3 . A bond issue with a face amount of $500,000 has a stated interest rate of 7%. The current market
rate of interest is 8%. These bonds will sell at a price that is:
Ch 9 - #4 . A bond is issued at face amount when:
A. The bond pays no interest.
B. The bond is not between interest payment dates.
C. Straight line amortization is used by the company.
D. The market rate of interest is the same as the stated rate of interest.
E. The bond is callable.