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erastovalidia [21]
3 years ago
9

On July 1, 2020, when the market rate of interest was 12%, TTS Corporation issued $100,000 of 10%, 10 year bonds, interest payab

le June 30 and December 31. The bonds were issued at 93. TTS’s fiscal year ends December 31. What is the amount of cash interest paid on December 31, 2020? Select one: a. $10,000 b. None of the above c. $5,000 d. $6,000 e. $12,000
Business
1 answer:
lawyer [7]3 years ago
5 0

Answer:

E) $12,000

Explanation:

the bonds were  issued at a discount for $93,000

the face value $100,0000

coupon rate 12%

even though the bonds were sold at a discount because the coupon rate was lower than the market rate,  the amount of cash paid as interest is based on the face value = $100,0000 x 12% = $12,000

the journal  entry to record the sale of the bonds would be:

Dr Cash 93,000

Dr Discount on bonds payable 7,000

    Cr Bonds payable 100,000

whatever method the company uses  to record interest, the amount of cash paid will  always be the same

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Explanation:

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Anastaziya [24]

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<h3>What is income tax?</h3>

A tax placed on people or organizations in relation to their income or profits is known as an income tax. Tax rates multiplied by taxable income are typically used to calculate income taxes. Tax rates might change depending on the taxpayer's attributes and source of income.

The complete part of the question is below:

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7 0
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The Tax Cuts and Jobs Act passed in December, 2017, eliminated any personal exemptions ($4,050 per preson) but increased the sta
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explanation is attached .

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