Question 1

The par value of a bond is also known as its ________________________.

Accepted Answer

face amoun

Question 2

On January 1,a company issues bonds with a par value of $300,000.The bonds mature in five years and pay 8% annual interest each June 30 and December 31.On the issue date,the market rate of interest is 6%.Compute the price of the bonds on their issue date.The following information is taken from present value tables:

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 3

A bondholder that owns a $1,000,10%,10-year bond has:

Accepted Answer

A) Ownership rights in the company who issued the bond. 
B) The right to receive $10 per year until maturity. 
C) The right to receive $1,000 at maturity. 
D) The right to receive $10,000 at maturity. 
E) The right to receive dividends of $1,000 per year. 
A) Ownership rights in the company who issued the bond. 
B) The right to receive $10 per year until maturity. 
C) The right to receive $1,000 at maturity. 
D) The right to receive $10,000 at maturity. 
E) The right to receive dividends of $1,000 per year.

Question 4

Explain how to record the issuance and sale of a bond between interest payment dates.

Accepted Answer

If a bond is issued at a date other than

Question 5

____________________ bonds reduce a bondholder's risk by requiring the issuer to create a fund of assets set aside as specified amounts and dates to repay the bonds at maturity.

Accepted Answer

The answer of ____________________ bonds reduce a bondholder's risk by...

Question 6

Define the debt to equity ratio and explain its use when it comes to analyzing the risk of a company's financial structure.

Accepted Answer

The debt to equity ratio is calculated b

Question 7

The carrying value of a bond payable at any point in time equals par value minus any unamortized _______________ or plus any unamortized _______________.

Accepted Answer

The answer of The carrying value of a bond payable...

Question 8

Bonds that have interest coupons attached to their certificates,which the bondholders detach during each interest period and present to a bank for collection,are called:

Accepted Answer

A) Coupon bonds. 
B) Callable bonds. 
C) Serial bonds. 
D) Convertible bonds. 
E) Clip and Carry bonds. 
A) Coupon bonds. 
B) Callable bonds. 
C) Serial bonds. 
D) Convertible bonds. 
E) Clip and Carry bonds.

Question 9

______________ bonds are bonds that are scheduled for maturity on one specified date.

Accepted Answer

The answer of ______________ bonds are bonds that are scheduled...

Question 10

On June 1,a company issued $200,000 of 12% bonds at their par value plus accrued interest.The interest on these bonds is payable semiannually on January 1 and July 1.Prepare the issuer's journal entry to record the bond issuance of June 1.

Accepted Answer

Interest payable: $2

Question 11

On January 1,2013,a company issued 10%,10-year bonds payable with a par value of $720,000.The bonds pay interest on July 1 and January 1.The bonds were issued for $817,860 cash,which provided the holders an annual yield of 8%.Prepare the general journal entry to record the first semiannual interest payment,assuming the company uses the straight-line method of amortization.

Accepted Answer

Cash payment: $720,000 x 0.10

Question 12

On June 1,Roberts Inc.issued bonds with a par value of $100,000.The bonds mature in 5 years and pay 12% annual interest,payable each June 30 and December 31.The bonds sell at par value plus interest accrued since January 1.How would the company record the issuance of the bonds on June 1?

Accepted Answer

A) Debit Cash for $100,000 and credit Bonds Payable for $100,000. 
B) Debit Cash for $105,000 and credit Bonds Payable for $105,000. 
C) Debit Cash for $101,000 and credit Bonds Payable for $101,000. 
D) Debit Cash for $105,000,credit Bonds Payable for $100,000,and credit Interest Payable for $5,000. 
E) Debit Cash for $101,000,credit Bonds Payable for $100,000,and credit Interest Payable for $1,000. 
A) Debit Cash for $100,000 and credit Bonds Payable for $100,000. 
B) Debit Cash for $105,000 and credit Bonds Payable for $105,000. 
C) Debit Cash for $101,000 and credit Bonds Payable for $101,000. 
D) Debit Cash for $105,000,credit Bonds Payable for $100,000,and credit Interest Payable for $5,000. 
E) Debit Cash for $101,000,credit Bonds Payable for $100,000,and credit Interest Payable for $1,000.

Question 13

A company issued 9%,10-year bonds with a par value of $1,000,000 on September 1,2013,when the market rate was 9%.The bonds were dated June 30,2013.The bond issue price included accrued interest.Interest is paid semiannually on December 31 and June 30.
(a) Prepare the issuer's journal entry to record the issuance of the bonds.
(b) Prepare the issuer's journal entry to record the semiannual interest payment on December 31,2013.

Accepted Answer

Interest payable: $1

Question 14

Describe the recording procedures for the issuance,retirement,and paying of interest for notes.

Accepted Answer

Alternatively,Mark might have pursued de

Question 15

On October 1,a $30,000,6%,three-year installment note payable is issued by a company.The note requires that $10,000 of principal plus accrued interest be paid at the end of each year on September 30.The issuer's journal entry to record the second annual interest payment would include:

Accepted Answer

A) A debit to Interest Expense for $1,800. 
B) A debit to Interest Expense for $1,200. 
C) A credit to Cash for $11,800. 
D) A credit to Cash for $10,000. 
E) A debit to Notes Payable for $1,200. 
A) A debit to Interest Expense for $1,800. 
B) A debit to Interest Expense for $1,200. 
C) A credit to Cash for $11,800. 
D) A credit to Cash for $10,000. 
E) A debit to Notes Payable for $1,200.

Question 16

A company issued 25-year,8% bonds with a par value of $900,000.The company received $1,000,000 cash for the bonds.Using the straight-line method,the amount of interest expense for the first semiannual interest period is:

Accepted Answer

A) $36,000 
B) $34,000 
C) $38,000 
D) $40,000 
E) $32,000 
A) $36,000 
B) $34,000 
C) $38,000 
D) $40,000 
E) $32,000

Question 17

A company has 10%,20-year bonds outstanding with a par value of $500,000.The company calls the bonds at 96 when the unamortized discount is $24,500.Calculate the gain or loss on the retirement of these bonds.

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 18

The process of systematically reducing a bond discount to zero over the life of the bond is called ______________________________.

Accepted Answer

amortizing

Question 19

Sinking fund bonds:

Accepted Answer

A) Require the issuer to set aside assets in order to retire the bonds at maturity. 
B) Require equal payments of both principal and interest over the life of the bond issue. 
C) Decline in value over time. 
D) Are registered bonds. 
E) Are bearer bonds. 
A) Require the issuer to set aside assets in order to retire the bonds at maturity. 
B) Require equal payments of both principal and interest over the life of the bond issue. 
C) Decline in value over time. 
D) Are registered bonds. 
E) Are bearer bonds.

Question 20

A pension plan is a contractual agreement between an employer and its employees in which the employer provides benefits to employees after they retire.

Accepted Answer

A) True 
 B)False

The par value of a bond is also known as its ________________________.

A bondholder that owns a $1,000,10%,10-year bond has:

Explain how to record the issuance and sale of a bond between interest payment dates.

____________________ bonds reduce a bondholder's risk by requiring the issuer to create a fund of assets set aside as specified amounts and dates to repay the bonds at maturity.

Define the debt to equity ratio and explain its use when it comes to analyzing the risk of a company's financial structure.

The carrying value of a bond payable at any point in time equals par value minus any unamortized _ or plus any unamortized _.

Bonds that have interest coupons attached to their certificates,which the bondholders detach during each interest period and present to a bank for collection,are called:

______________ bonds are bonds that are scheduled for maturity on one specified date.

On June 1,a company issued $200,000 of 12% bonds at their par value plus accrued interest.The interest on these bonds is payable semiannually on January 1 and July 1.Prepare the issuer's journal entry to record the bond issuance of June 1.

On June 1,Roberts Inc.issued bonds with a par value of $100,000.The bonds mature in 5 years and pay 12% annual interest,payable each June 30 and December 31.The bonds sell at par value plus interest accrued since January 1.How would the company record the issuance of the bonds on June 1?

Describe the recording procedures for the issuance,retirement,and paying of interest for notes.

On October 1,a $30,000,6%,three-year installment note payable is issued by a company.The note requires that $10,000 of principal plus accrued interest be paid at the end of each year on September 30.The issuer's journal entry to record the second annual interest payment would include:

A company issued 25-year,8% bonds with a par value of $900,000.The company received $1,000,000 cash for the bonds.Using the straight-line method,the amount of interest expense for the first semiannual interest period is:

A company has 10%,20-year bonds outstanding with a par value of $500,000.The company calls the bonds at 96 when the unamortized discount is $24,500.Calculate the gain or loss on the retirement of these bonds.

The process of systematically reducing a bond discount to zero over the life of the bond is called ______________________________.

Sinking fund bonds:

A pension plan is a contractual agreement between an employer and its employees in which the employer provides benefits to employees after they retire.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

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 and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 10: Reporting and Analyzing Long-Term Liabilities

The par value of a bond is also known as its ________________________.

A bondholder that owns a $1,000,10%,10-year bond has:

Explain how to record the issuance and sale of a bond between interest payment dates.

____________________ bonds reduce a bondholder's risk by requiring the issuer to create a fund of assets set aside as specified amounts and dates to repay the bonds at maturity.

Define the debt to equity ratio and explain its use when it comes to analyzing the risk of a company's financial structure.

The carrying value of a bond payable at any point in time equals par value minus any unamortized _______________ or plus any unamortized _______________.

Bonds that have interest coupons attached to their certificates,which the bondholders detach during each interest period and present to a bank for collection,are called:

______________ bonds are bonds that are scheduled for maturity on one specified date.

On June 1,a company issued $200,000 of 12% bonds at their par value plus accrued interest.The interest on these bonds is payable semiannually on January 1 and July 1.Prepare the issuer's journal entry to record the bond issuance of June 1.

On June 1,Roberts Inc.issued bonds with a par value of $100,000.The bonds mature in 5 years and pay 12% annual interest,payable each June 30 and December 31.The bonds sell at par value plus interest accrued since January 1.How would the company record the issuance of the bonds on June 1?

Describe the recording procedures for the issuance,retirement,and paying of interest for notes.

On October 1,a $30,000,6%,three-year installment note payable is issued by a company.The note requires that $10,000 of principal plus accrued interest be paid at the end of each year on September 30.The issuer's journal entry to record the second annual interest payment would include:

A company issued 25-year,8% bonds with a par value of $900,000.The company received $1,000,000 cash for the bonds.Using the straight-line method,the amount of interest expense for the first semiannual interest period is:

A company has 10%,20-year bonds outstanding with a par value of $500,000.The company calls the bonds at 96 when the unamortized discount is $24,500.Calculate the gain or loss on the retirement of these bonds.

The process of systematically reducing a bond discount to zero over the life of the bond is called ______________________________.

Sinking fund bonds:

A pension plan is a contractual agreement between an employer and its employees in which the employer provides benefits to employees after they retire.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

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 and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

The carrying value of a bond payable at any point in time equals par value minus any unamortized _ or plus any unamortized _.