On January 1. 2015. Anthony Corporation issued $800.000 of 6%. 5-year bonds at 9
ID: 2722108 • Letter: O
Question
On January 1. 2015. Anthony Corporation issued $800.000 of 6%. 5-year bonds at 98. with interest paid annually. Using the straight-line amortization method, what Is the carrying value of the bonds one year later on January 1, 2016? $784,000 $785,600 $787,200 $790,400 Cannot be determined from the data given. Marshall Corporation has $30,000 of bonds outstanding with a carrying value of $38,400. The bonds are converted into 15.000 shares of $1 par value common stock immediately after the last interest payment. The common stock had a market value of .5 per share on the date of conversion. The entry to record the conversion would include a credit to; Common Stock for $15,000 and credit to Paid-in Capital in Excess of Par for $8,400. Bonds Payable for $30,000 and credit to Premium on Bonds Payable for $8,400. Cash for $38,400. Common Stock for $ 15.000 and credit to Paid-in Capital in Excess of Par for $23,400. I cannot copy my neighbor's answer because he does not know the answer either. A disadvantage of using bonds as a method of long-term financing is that with bonds and a disadvantage of issuing stock is that stock interest must be paid; generally results in lower earnings. interest expense is tax deductible; less to the issuing company bonds do not dilute stockholders' ownership; equity creates dividend expense issuing bonds results in higher earnings per share; creates no liabilities. I don't understand the differences stocks and bonds. A company has a lawsuit pending with regard to patent infringement. The amount of the Joss can be estimated and has a probable chance of occurrence. What journal entry is required? debit Lawsuit Loss and credit Cash debit Estimated Lawsuit Loss and credit Cash debit Cash and credit Estimated Lawsuit Liability debit Estimated Lawsuit Loss and credit Estimated Lawsuit Liability Prepare a note/memorandum to the financial statements. Which statement is FALSE? Preferred stockholders receive dividends before the common stockholders only if the preferred stock is cumulative. Preferred stockholders receive dividends before the common stockholders. Preferred stockholders receive assets before the common stockholders if the corporation liquidates. Preferred stockholders have the same basic four rights as common stockholders, unless aExplanation / Answer
30) Carrying value of bonds after one year = 784000 + 16000 / 5 = $787200 (option C)
31) option E, because Journal entry carries on credit side=Common Stock $15000 & Paid in Capital in excess $15000
32) (option A) i.e. Interest must be paid , generally results in lower earnings
33) (option D) i.e. debit Estimated Lawsuit Loss and credit Estimated Lawsuit Liability
34) (option B) ie. Preferred stockholders receive dividends before the common stockholders