bonds payable accounting 494474

Handout to review material covering Bonds (10 points) 1. Why would bonds ever sell at a premium? a. Stated Rate = Market Rate b. Stated Rate > Market Rate c. Stated Rate < Market Rate 2. Why would bonds ever sell at a discount? a. Stated Rate = Market Rate b. Stated Rate > Market Rate c. Stated Rate < Market Rate 3. At what amount do bonds sell for if the Stated Rate is equal to the Market Rate? a. Bonds sell at a Discount b. Bonds sell at Face Value c. Bonds sell at a Premium 4. $500,000, 10%, 20 year bonds sell at 102. These bonds are selling at a a. Discount b. Premium Give the amount of cash received for these bonds when sold. ____________ 5. On the day the bonds were dated, Willow Corp. issued 12% bonds having a face value of $100,000 for $95,233. a. What entry is required to record the sale of the bonds? __________________________________________________ __________________________________________________ b. What amount of interest would be paid to bondholders annually? ____________ c. What amount of interest would be paid to bondholders semi-annually? ____________ ??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????