On January 1,2016,O'Keefe Co

Short Answer

On January 1,2016,O'Keefe Co.issued bonds with a face value of $400,000 and a stated interest rate of 10%.The bonds have a life of ten years and were sold at 108.O'Keefe uses the straight-line method to amortize bond discounts and premiums.On December 31,2019,O'Keefe called the bonds at 106.Indicate whether each of the following statements is true or false.
_____ a)The interest expense for 2016 was $40,000.
_____ b)The balance in the bonds payable account on December 31,2016 was $400,000.
_____ c)The carrying value of bonds payable on December 31,2019 was $419,200.
_____ d)When O'Keefe repurchased the bonds,total assets decreased by $419,200.
_____ e)When O'Keefe repurchased the bonds,it had to recognize a loss in the amount of $4,800.