When bonds are issued at a discount, the recorded amount of bond interest expense for a given time period bears what relationship to the amount of bond interest payable for the same time period? O The recorded amount of bond interest expense is the same as the amount of bond interest payable. The recorded amount of bond interest expense is lower than the amount of bond interest payable. O The recorded amount of bond interest expense is higher than the amount of bond interest payable. ○ There is absolutely no relationship between the amount recorded bond interest expense and the amount of bond interest payable.

When bonds are issued at a discount, the recorded amount of bond interest expense for a given time period bears what relationship to the amount of bond interest payable for the same time period? O The recorded amount of bond interest expense is the same as the amount of bond interest payable. The recorded amount of bond interest expense is lower than the amount of bond interest payable. O The recorded amount of bond interest expense is higher than the amount of bond interest payable. ○ There is absolutely no relationship between the amount recorded bond interest expense and the amount of bond interest payable.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 11GI

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Similar questions

Does issuing a bond at a discount increase or decrease interest expense over the life of the bond?
When bonds are redeemed before maturity, how is the gain or loss on redemption determined? Why does the calculation differ for bonds issued at face value, at a premium, and at a discount?
What accounts are affected when bonds are issued at face value?
When accounting for a bond whose interest is included in the face amount, the account Discount in Bonds Payable eventually is converted into Interest Payable Interest Receivable Interest Expense Interest Income
If bonds issue at a premium, what happens to the carrying value of bonds payable and the amount recorded for interest expense over time?
When the effective-interest method is used, the amount of bond discount amortized eachinterest period is equal to thea. amount of interest expense less the cash paid for interest.b. amount of interest expense plus the cash paid for interest.c. face value of the bond times the market interest rate at the date of issue.d. face value of the bond times the stated interest rate.
When bonds are issued at a discount, the interest expense for the period is A. The amount of interest payment for the period minus the discount amortization for the period B. The amount of interest payment for the period plus the discount amortization for the period. C. The amount of interest payment for the period minus the premium amortization for the period D. The amount of interest payment for the period plus the premium amortization for the period.
On the balance sheet, the account Premium on Bonds Payable is: Select one: a. Added to Bonds Payable b. Added to Bond Interest Expense c. Deducted from Bond Interest Expense d. Deducted from Bonds Payable
The Discount on Bonds Payable accounta. is an expense account.b. is a contra account to Bonds Payable.c. is expensed at the bond’s maturity.d. is a miscellaneous revenue account.
When determining the amount of interest to be paid on a bond, which of the following information is not necessary? a. The length of the interest period, annually or semiannually b. The face rate of interest on the bonds c. The face amount of the bonds d. The selling price of the bonds
A debit to Premium on Bonds Payable would least likely be possible on which of the situations? record of interest expense which is lower than the amount paid amortization of a bond premium early retirement of bonds increase in the carrying amount of bonds
What type of account is Discount on Bonds Payable? What is its normal balance? Is it added to or subtracted from the Bonds Payable account to determine the carrying amount?