On January 1 of Year 1, Congo Express Airways issued $3,600,000of 8% bonds that pay interest semiannually on January 1 and July 1.The bond issue price is $3,300,000 and the market rate of interestfor similar bonds is 9%. The bond premium or discount is beingamortized at a rate of $10,000 every six months. The company'sDecember 31, Year 1 balance sheet should reflect total liabilitiesassociated with the bond issue in the amount of: $4,024,000.$3,464,000. $3,176,000. $3,320,000. $3,880,000.

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Sixta KovacekLv2

28 Sep 2019

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On January 1 of Year 1, Congo Express Airways issued $3,600,000of 6% bonds that pay interest semiannually on January 1 and July 1.The bond issue price is $3,270,000 and the market rate of interestfor similar bonds is 7%. The bond premium or discount is beingamortized at a rate of $11,000 every six months. The amount ofinterest expense recognized by Congo Express Airways on the bondissue in Year 1 would be:

a) $238,000

b) $216,000

c) $252,000

d) $194,000

e) $119,000

121. On January 1 of Year 1, Mohr Express Airways issued $3,150,000 of 5% bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $2,840,000 and the market rate of interest for similar bonds is 6%. The bond premium or discount is being amortized at a rate of $10,333 every six months. After accruing interest at year end, the company's December 31, Year 1 balance sheet should reflect total liabilities associated with the bond issue in the amount of:

121B. Mohr Company purchases a machine at the beginning of the year at a cost of $30,000. The machine is depreciated using the straight-line method. The machineâs useful life is estimated to be 8 years with a $4,000 salvage value. Depreciation expense in year 2 is:

121. Mohr Company purchases a machine at the beginning of the year at a cost of $64,000. The machine is depreciated using the straight-line method. The machineâs useful life is estimated to be 5 years with a $2,000 salvage value. Depreciation expense in year 4 is:

On January 1, Year 1, Acorn Financial Corp. issued 850convertible bonds. Each $1,000 face value bond is convertible into5 shares of common stock. The bonds have a 10 year term to maturityand pay interest semiannually. Acorn's common stock has a par valueof $20.00 per share. The bonds have a stated interest rate of 4%and pay interest semiannually. The convertible bonds were sold for$875,500. Bond issue costs of $50,000 will be subtracted from thebond sale proceeds to be received by Acorn. The bonds were sold toyield a market interest rate of 3%. Acorn will use the effectiveinterest method to amortize the bond discount and/or premium. Roundall amounts to the nearest dollar.
1.Record the journal entry for the issuance of the convertiblebonds on January 1, Year 1.

2.Record the journal entries on June 30, Year 1 to recognizeinterest expense and the amortization of the bond issue cost forthe first six months of Year

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