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51) Smith Corporation issues $400,000, 10%, five-year bonds at 95. The total interest expense over the life of the bonds is:

A) $40,000

B) $220,000

C) $180,000

D) $200,000

52) Several years ago, Bee Corporation issued $400,000, 10% bonds for $380,000. The balance in the discount on bonds payable account at the end of the current year is $8,000. The balance sheet for the current year would show a net liability of:

A) $408,000

B) $380,000

C) $372,000

D) $392,000

53) On January 2, 2010, Carter Corporation issued $200,000, 10%, 10-year bonds for $160,000. The bonds pay interest each December 31. Carter Corporation uses the straight-line method to amortize premium or discount. On December 31, 2010, Carter Corporation would record a:

A) credit to cash for $16,000

B) debit to interest expense for $16,000

C) debit to interest expense for $24,000

D) credit premium on bonds payable for $4,000

54) A $1,000 bond quoted at 97.75 is selling for:

A) $970.75

B) $907.75

C) $977.50

D) $973.40

55) Discount on bonds payable is a(n):

A) contra asset account

B) adjunct account to bonds payable

C) contra shareholders' equity account

D) contra account to bonds payable

56) The book value of bonds is equal to bonds payable:

A) plus the unamortized discount

B) less the unamortized discount

C) less the amortized discount

D) plus the amortized discount

57) Laser Corporation issues 50, $1,000 maturity value, 10% bonds at 102.5. The journal entry includes a:

A) debit to cash for $50,000

B) credit to bonds payable for $51,250

C) debit to discount on bonds payable for $1,250

D) credit to premium on bonds payable for $1,250

58) Jones Corporation issues $400,000, 10%, five-year bonds at face value. The total interest expense over the life of the bonds is:

A) $40,000

B) $400,000

C) $200,000

D) $8,000

59) Kuhnapfel Corporation issues $1,000,000, 8%, five-year bonds at face value. The total interest expense over the life of the bonds is:

A) $400,000

B) $800,000

C) $600,000

D) $80,000

60) Jackson Corporation issues $400,000, 10%, five-year bonds at 103. The total interest expense over the life of the bonds is:

A) $188,000

B) $212,000

C) $200,000

D) $40,000

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