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Determine the total interest expense

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Q1. Bonds Payable has a balance of $972,000 and Discount on Bonds Payable has a balance of $11,664. If the issuing corporation redeems the bonds at 98, what is the amount of gain or loss on redemption?

a. $7,776 loss

b. $7,776 gain

c. $11,664 gain

d. $11,664 loss

Q2. On January 1, $827,000, 5-year, 10% bonds, were issued for $802,190. Interest is paid semiannually on January 1 and July 1. If the issuing corporation uses the straight-line method to amortize discount on bonds payable, the semiannual amortization amount is

a. $24,810

b. $2,481

c. $4,962

d. $41,350

Q3. The Levi Company issued $86,000 of 9% bonds on January 1 of the current year at face value. The bonds pay interest semiannually on June 30 and December 31. The bonds are dated January 1, and mature in five years, on January 1. Determine the total interest expense related to these bonds for the current year ending on December 31 is

a. $7,740

b. $5,805

c. $645

d. $3,870

Reference no: EM132814682

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