Vantage Company issued bonds with a $500,000 face value and a 6% stated rate of interest on January 1, 2013. The bonds carried a 5-year term and sold for 95. Vantage uses the straight-line method of amortization. Interest is payable on December 31 of each year.
4. The carrying value of the bond liability on the December 31, 2015 balance sheet was:
A. $490,000.
B. $485,000.
C. $495,000.
D. $482,000.
5. The amount of interest expense appearing on the December 31, 2015 income statement would be:
A. $30,000.
B. $35,000.
C. $28,500.
D. $25,000.
6. The amount of cash flow from operating activities on the December 31, 2015 statement of cash flows would be:
A. $30,000.
B. $35,000.
C. $28,500.
D. $25,000.
8. If Winfield issued the bonds for 96,
A. the market rate of interest was equal to the stated rate of interest.
B. the market rate of interest was higher than the stated interest rate.
C. the market rate of interest was lower than the stated rate of interest.
D. the bonds carried a variable or floating rate that changed in response to market conditions.
9. Frazier Corporation shows a total of $660,000 in its Common Stock account and $1,600,000 in its Paid-in Capital Excess account. The par value of Frazier's common stock is $4. How many shares of Frazier stock have been issued?
A. 165,000.
B. 400,000.
C. 235,000.
D. It cannot be determined
10.
Garrison Corporation has the following stock outstanding:
4% Cumulative preferred stock $ 800,000
$20 stated value
Common Stock, $12 par $4.800,000
In 2013, Garrison paid $300,000 in dividends. No dividends were paid in 2011 or 2012.
Required:
a) Compute the total amount of dividends that was paid to each.
Hint: Must determine number of shares of preferred and common stock.