The premium on bonds payable account is a n
Webb(Conversion of Bonds) Vargo Company has bonds payable outstanding in the amount of $500,000, and the Premium on Bonds Payable account has a balance of $7,500. Each $1,000 bond is convertible into 20 shares of preferred stock of par value of $50 per share. All bonds are converted into preferred stock. Instructions WebbPremium on bonds payable (or bond premium) occurs when bonds payable are issued for an amount greater than their face or maturity amount. This is caused by the bonds …
The premium on bonds payable account is a n
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WebbQ: he amortization of premium on bonds payable will _____________ the net income. A: Net Income:- Net income is also considered as the net earnings and net profit of the business that…. Q: The amortization on a bond premium: A: The amortization on a bond premium: (d) Is calculated by multiplying the bond’s carrying value by….
WebbOnce the first journal entry is prepared for the premium on bonds payable it can just be repeated each period until maturity. The simple formula to be used is: Bond Premium / … WebbThe Premium on Bonds Payable account is a (n): Adjunct liability account. Equity account. Revenue account. Contra asset account. Contra revenue account. This problem has …
WebbLike the Premium on Bonds Payable account, the discount on bonds payable account is a contra liability account and is “married” to the Bonds Payable account on the balance sheet. The Discount will disappear over time as it is amortized, but it will increase the interest expense, which we will see in subsequent journal entries. Webb100% (2 ratings) The Discount on bonds payable account is A Contra Liability accoumt A contra liabilit … View the full answer Transcribed image text: 20. The Discount on Bonds Payable account is: A) A liability B) A contra liability. C) An expense. D) A contra expense. E) A contra equity. Previous question Next question
Webb20 juli 2024 · The Premium on Bonds Payable account is "the amount by which bonds are issued in excess of their face value." What are bonds payable? When a firm issues bonds to earn cash, bonds payable are recorded. The corporation is a borrower since it is a bond issuer. As a result, just issuing the bond creates an obligation.
WebbDiscount on bonds payable is a contra account that decreases the value of the bonds and is subtracted from the bonds payable in the long‐term liability section of the balance sheet. Initially, it is the difference between the cash received and the maturity value of the bond. On Maturity - Journal Entry ip location pullerWebbAnalyzing, journalizing, and reporting bond transactions. Johnny’s Hamburgers issued 8%, 10-year bonds payable at 85 on December 31, 2024. At December 31, 2024, Johnny reported the bonds payable as follows: Long-term Liabilities: Bonds Payable $ 300,000. Less: Discount on Bonds Payable (36,000) $ 264,000 ip location redditWebbBonds that require payment of the full principle amount of the bond at the end of the loan term are referred to as 6% stated interest rate and 4% market interest rate Premium - … ip location locateWebb21 sep. 2024 · Premium on bonds payable is the excess amount by which bonds are issued over their face value. This is classified as a liability, and is amortized to interest … oral-b pro 600 floss actionWebbQuestion: The premium on bonds payable account is a (n) 1. Revenue account 2. Adjunct liability account 3. Contra revenue account 4. Contra asset account . Equity account. The … ip location queryWebbPremium on Bonds Payable a. has a debit balance. b. is a contra account. c. is considered to be a reduction in the cost of borrowing. d. is deducted from bonds payable on the balance sheet. If the market interest rate is greater than the contractual interest rate, bonds will sell a. at a premium. b. at face value. c. at a discount. d. ip location headerWebb26 dec. 2024 · Premium on bonds payable is the excess amount by which bonds are issued over their face value. This is classified as a liability on the books of the issuer, … ip location my