29. In year 1, Jeremy Corporation issued 1,000 of its 8 % $ 1,000 bonds for $ 1,040,000. The bonds were due on December 1, year 11. Jeremy did not elect the fair value option for reporting financial liabilities. On October 1, year 7, as part of its normal financing management strategy, Jeremy Corporation redeemed the bonds at a time when the carrying value of the bonds was $ 50,000 more than the cash paid to retire the bonds. Jeremy should report the $ 50,000 gain as
30. On December 31, year 1, Wall Corp. issued $ 100,000 maturity value, 10 % bonds for $ 100,000 cash. The bonds are dated December 31, year 1, and mature on December 31, year 11. Interest will be paid semiannually on June 30 and December 31. In Wall’ s September 30, year 2 balance sheet, the amount of accrued interest expense should be
31. Which of the following statements is true?
32. For a troubled debt restructuring involving only modification of terms, it is appropriate for a debtor to recognize a gain when the carrying amount of the debt
33. Tone Company is the defendant in a lawsuit filed by Witt in year 1 disputing the validity of a copyright held by Tone. At December 31, year 1, Tone determined that Witt would probably be successful against Tone for an estimated amount of $ 400,000. Appropriately, a $ 400,000 loss was accrued by a charge to income for the year ended December 31, year 1. On December 15, year 2, Tone and Witt agreed to a settlement providing for cash payment of $ 250,000 by Tone to Witt, and transfer of Tone’ s copyright to Witt. The carrying amount of the copyright on Tone’ s accounting records was $ 60,000 at December 15, year 2. What would be the effect of the settlement on Tone’ s income before income tax in year 2?
34. Blake Foods Corporation mails coupons to consumers which may be presented by a stated expiration date at retail food stores to obtain discounts on certain Blake products. Retailers are reimbursed for the