Reference no: EM132643177

Problem 1: On 6/30/12, a company recorded a journal entry for the coupon payment on its bond. As part of the journal entry, the company credited bonds payable. Which of the following is true regarding this journal entry? (check all that apply)

Option 1: The coupon rate is greater than the effective rate

Option 2: The bond was issued at a discount

Option 3: The company debited Interest Expense

Option 4: The proceeds of the bond were less than the face value

Option 5: The company credited Cash

Problem 1: On 6/30/12, a company paid $106,000 to retire a bond before maturity. The company recorded a $6,000 loss as part of the transaction. Which of the following must be true regarding this transaction? (check all that apply)

Option 1: The market interest rate had decreased since the bond was issued

Option 2: The face value of the bond was $106,000

Option 3: The company paid more than the current fair value of the bond to retire it.

Option 4: The face value of the bond was $100,000

Option 5: The market interest rate had increased since the bond was issued