Question 1

Interest on bonds is tax deductible,while dividend payments are not tax deductible.

Accepted Answer

A) True 
 B)False

Question 2

On January 1,a company issued a $500,000,10%,8-year bond payable,and received proceeds of $473,845.Interest is payable each June 30 and December 31.The company uses the straight-line method to amortize the discount.The amount of discount amortized each period is $1,634.69.

Accepted Answer

A) True 
 B)False

Question 3

A 10-year bond issue with a $100,000 par value,8% annual contract rate,with interest payable semiannually means that the issuer must repay $100,000 at the end of 10 years and make 20 semiannual interest payments of $4,000 each.

Accepted Answer

A) True 
 B)False

Question 4

An advantage of bonds is:

Accepted Answer

A) Bonds do not affect owner control. 
B) Bonds require payment of par value at maturity. 
C) Bonds can decrease return on equity. 
D) Bond payments can be burdensome when income and cash flow are low. 
E) Bonds require payment of periodic interest. 
A) Bonds do not affect owner control. 
B) Bonds require payment of par value at maturity. 
C) Bonds can decrease return on equity. 
D) Bond payments can be burdensome when income and cash flow are low. 
E) Bonds require payment of periodic interest.

Question 5

On January 1,a company issued and sold a $400,000,7%,10-year bond payable,and received proceeds of $396,000.Interest is payable each June 30 and December 31.The company uses the straight-line method to amortize the discount.The carrying value of the bonds immediately after the first interest payment is:

Accepted Answer

A) $400,000. 
B) $399,800. 
C) $400,200. 
D) $395,800. 
E) $396,200. 
A) $400,000. 
B) $399,800. 
C) $400,200. 
D) $395,800. 
E) $396,200.

Question 6

On January 1,a company issued a $500,000,10%,8-year bond payable,and received proceeds of $473,845.Interest is payable each June 30 and December 31.The total interest expense on the bond over its eight-year life is $400,000.

Accepted Answer

A) True 
 B)False

Question 7

A company issues 9%,5-year bonds with a par value of $100,000 on January 1 at a price of $104,055,when the market rate of interest was 8%.The bonds pay interest semiannually.The amount of each semiannual interest payment is:

Accepted Answer

A) $9,000. 
B) $8,000. 
C) $4,000. 
D) $4,500. 
E) $0. 
A) $9,000. 
B) $8,000. 
C) $4,000. 
D) $4,500. 
E) $0.

Question 8

A basic present value concept is that cash paid or received in the future has more value now than the same amount of cash received today.

Accepted Answer

A) True 
 B)False

Question 9

A company's debt-to-equity ratio was 1.0 at the end of Year 1.By the end of Year 2,it had increased to 1.7.Since the ratio increased from Year 1 to Year 2,the degree of risk in the firm's financing structure decreased during Year 2.

Accepted Answer

A) True 
 B)False

Question 10

Describe the journal entries required to record the issuance of bonds at a premium and the payment of bond interest,including any applicable amortization.

Accepted Answer

The journal entry to record a bond issua

Question 11

Bonds issued in the names and addresses of their holders are ________ bonds.

Accepted Answer

The answer of Bonds issued in the names and addresses...

Interest on bonds is tax deductible,while dividend payments are not tax deductible.

On January 1,a company issued a $500,000,10%,8-year bond payable,and received proceeds of $473,845.Interest is payable each June 30 and December 31.The company uses the straight-line method to amortize the discount.The amount of discount amortized each period is $1,634.69.

A 10-year bond issue with a $100,000 par value,8% annual contract rate,with interest payable semiannually means that the issuer must repay $100,000 at the end of 10 years and make 20 semiannual interest payments of $4,000 each.

An advantage of bonds is:

On January 1,a company issued a $500,000,10%,8-year bond payable,and received proceeds of $473,845.Interest is payable each June 30 and December 31.The total interest expense on the bond over its eight-year life is $400,000.

A company issues 9%,5-year bonds with a par value of $100,000 on January 1 at a price of $104,055,when the market rate of interest was 8%.The bonds pay interest semiannually.The amount of each semiannual interest payment is:

A basic present value concept is that cash paid or received in the future has more value now than the same amount of cash received today.

A company's debt-to-equity ratio was 1.0 at the end of Year 1.By the end of Year 2,it had increased to 1.7.Since the ratio increased from Year 1 to Year 2,the degree of risk in the firm's financing structure decreased during Year 2.

Describe the journal entries required to record the issuance of bonds at a premium and the payment of bond interest,including any applicable amortization.

Bonds issued in the names and addresses of their holders are ________ bonds.

Introducing Financial Statements

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters

Exam 10: Reporting and Analyzing Long-Term Liabilities

Interest on bonds is tax deductible,while dividend payments are not tax deductible.

On January 1,a company issued a $500,000,10%,8-year bond payable,and received proceeds of $473,845.Interest is payable each June 30 and December 31.The company uses the straight-line method to amortize the discount.The amount of discount amortized each period is $1,634.69.

A 10-year bond issue with a $100,000 par value,8% annual contract rate,with interest payable semiannually means that the issuer must repay $100,000 at the end of 10 years and make 20 semiannual interest payments of $4,000 each.

An advantage of bonds is:

On January 1,a company issued a $500,000,10%,8-year bond payable,and received proceeds of $473,845.Interest is payable each June 30 and December 31.The total interest expense on the bond over its eight-year life is $400,000.

A company issues 9%,5-year bonds with a par value of $100,000 on January 1 at a price of $104,055,when the market rate of interest was 8%.The bonds pay interest semiannually.The amount of each semiannual interest payment is:

A basic present value concept is that cash paid or received in the future has more value now than the same amount of cash received today.

A company's debt-to-equity ratio was 1.0 at the end of Year 1.By the end of Year 2,it had increased to 1.7.Since the ratio increased from Year 1 to Year 2,the degree of risk in the firm's financing structure decreased during Year 2.

Describe the journal entries required to record the issuance of bonds at a premium and the payment of bond interest,including any applicable amortization.

Bonds issued in the names and addresses of their holders are ________ bonds.

Introducing Financial Statements

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters