Question 1

_______________ bonds have specific assets of the issuing company pledged as collateral.

Accepted Answer

The answer of _______________ bonds have specific assets of the...

Question 2

A company issues at par 7% bonds with a par value of $500,000 on June 1,which is 5 months after the most recent interest date.How much total cash interest is received on May 1 by the bond issuer?

Accepted Answer

A) $0 
B) $2,916.66 
C) $100,000.00 
D) $14,583.33 
E) $35,000.00 
A) $0 
B) $2,916.66 
C) $100,000.00 
D) $14,583.33 
E) $35,000.00

Question 3

When the bond contract rate of interest is above the market rate of interest for that bond,the bond sells at a _____________.

Accepted Answer

The answer of When the bond contract rate of interest...

Question 4

A company issues 9%,20-year bonds with a par value of $750,000.The current market rate is 9%.The amount of interest owed to the bondholders for each semiannual interest payment is.

Accepted Answer

A) $0 
B) $33,750 
C) $67,500 
D) $750,000 
E) $1,550,000 
A) $0 
B) $33,750 
C) $67,500 
D) $750,000 
E) $1,550,000

Question 5

The debt to equity ratio is calculated by dividing total company's liabilities by the company's total assets.

Accepted Answer

A) True 
 B)False

Question 6

A company enters into an agreement to make 5 annual year-end payments of $3,000 each,which will being one year from now.The annual interest rate is 6%.The present value of an annuity factor for 5 periods,6% is 4.2124.What is the present value of these five payments?

Accepted Answer

$3,000 x 4

Question 7

How are bond issue prices determined?

Accepted Answer

The issue price of bonds is found by com

Question 8

On January 1,2010,Lane issues $700,000 of 7%,15-year bonds at a price of 106 3/4.The interest payments are made on June 30 and December 31.Lane elects a fiscal year ending September 30.What is the amount that would be recorded as Interest Expense in the December 31,2010 journal entry?

Accepted Answer

A) $24,500 
B) $22,925 
C) $12,250 
D) $11,462 
E) $13,458 
A) $24,500 
B) $22,925 
C) $12,250 
D) $11,462 
E) $13,458

Question 9

On January 1,2010,Lane issues $700,000 of 7%,15-year bonds at a price of 106 3/4.The interest payments are made on June 30 and December 31.Lane elects a fiscal year ending September 30.What is the amount that would be recorded as cash paid in the December 31,2010 journal entry?

Accepted Answer

A) $24,500 
B) $22,925 
C) $12,250 
D) $11,462 
E) $13,458 
A) $24,500 
B) $22,925 
C) $12,250 
D) $11,462 
E) $13,458

Question 10

The effective interest method yields increasing amounts of bond interest expense and decreasing amount of premium amortization over the life of the bond .

Accepted Answer

A) True 
 B)False

Question 11

A company issued 10-year,9% bonds with a par value of $500,000 when the market rate was 9.5%.The company received $484,087 in cash proceeds.Using the straight-line method,prepare the issuer's journal entry to record the first semiannual interest payment and the amortization of any bond discount or premium.

Accepted Answer

\[\begin{array} { | l | r | r

Question 12

A company can reserve the right to retire bonds before their maturity date by issuing _______________ bonds.

Accepted Answer

The answer of A company can reserve the right to...

Question 13

A company must repay the bank $10,000 cash in 3 years for a loan.The loan agreement specifies 8% interest compounded annually.The present value factor for 3 years at 8% is 0.7938.The present value of the loan is:

Accepted Answer

A) $10,000 
B) $12,400 
C) $7,938 
D) $9,200 
E) $7,600 
A) $10,000 
B) $12,400 
C) $7,938 
D) $9,200 
E) $7,600

Question 14

A company issued 9.2%,10-year bonds with a par value of $100,000.Interest is paid semiannually.The market interest rate on the issue date was 10% and the issuer received $95,016 cash for the bonds.On the first semiannual interest date,what amount of cash should be paid to the holders of these bonds for interest?

Accepted Answer

$100,000 x

Question 15

On January 1,2010,Timley issues 2,200,000 of 6%,12-year bonds at a price of 105½ that pay interest semi-annually.The straight-line method is used to amortize any bond discount.What is the journal entry to record the issuance of the bonds on January 1,2010?

Accepted Answer

Cash………………………2,321,0

Question 16

A discount on bonds payable:

Accepted Answer

A) Occurs when a company issues bonds with a contract rate less than the market rate 
B) Occurs when a company issues bonds with a contract rate more than the market rate 
C) Increases the Bond Payable account 
D) Decreases the total bond interest expense 
E) Is not allowed in many states to protect creditors 
A) Occurs when a company issues bonds with a contract rate less than the market rate 
B) Occurs when a company issues bonds with a contract rate more than the market rate 
C) Increases the Bond Payable account 
D) Decreases the total bond interest expense 
E) Is not allowed in many states to protect creditors

Question 17

A _______________________ is a contractual agreement between an employer and its employees for the employer to provide benefits (payments)to employees after they retire.

Accepted Answer

The answer of A _______________________ is a contractual agreement between...

Question 18

A discount on bonds payable occurs when a company issues bonds with an issue price less than par value.

Accepted Answer

A) True 
 B)False

Question 19

On January 1,a company issues bonds with a par value of $300,000.The bonds mature in 5 years and pay 8% annual interest,payable each June 30 and December 31.On the issue date,the market rate of interest for the bonds is 10%.Compute the price of the bonds on their issue date.The following information is taken from present value tables:
 $\begin{array}{|l|l|}
\hline \text { Present value of an annuity for } 10 \text { periods at } 4 \% & 8.1109 \
\hline \text { Present value of an annuity for } 10 \text { periods at } 5 \% & 7.7217 \
\hline \text { Present value of } 1 \text { for } 10 \text { periods at } 4 \% & 0.6756 \
\hline \text { Present value of } 1 \text { for } 10 \text { periods at } 5 \% & 0.6139 \
\hline
\end{array}$

Accepted Answer

None

Question 20

A company issued 5-year,7% bonds with a par value of $100,000.The company received $97,947 for the bonds.Using the straight-line method,the amount of interest expense for the first semiannual interest period is:

Accepted Answer

A) $3,294.70 
B) $3,500.00 
C) $3,705.30 
D) $7,000.00 
E) $7,410.60 
A) $3,294.70 
B) $3,500.00 
C) $3,705.30 
D) $7,000.00 
E) $7,410.60

_______________ bonds have specific assets of the issuing company pledged as collateral.

A company issues at par 7% bonds with a par value of $500,000 on June 1,which is 5 months after the most recent interest date.How much total cash interest is received on May 1 by the bond issuer?

When the bond contract rate of interest is above the market rate of interest for that bond,the bond sells at a _____________.

A company issues 9%,20-year bonds with a par value of $750,000.The current market rate is 9%.The amount of interest owed to the bondholders for each semiannual interest payment is.

The debt to equity ratio is calculated by dividing total company's liabilities by the company's total assets.

A company enters into an agreement to make 5 annual year-end payments of $3,000 each,which will being one year from now.The annual interest rate is 6%.The present value of an annuity factor for 5 periods,6% is 4.2124.What is the present value of these five payments?

How are bond issue prices determined?

On January 1,2010,Lane issues $700,000 of 7%,15-year bonds at a price of 106 3/4.The interest payments are made on June 30 and December 31.Lane elects a fiscal year ending September 30.What is the amount that would be recorded as Interest Expense in the December 31,2010 journal entry?

On January 1,2010,Lane issues $700,000 of 7%,15-year bonds at a price of 106 3/4.The interest payments are made on June 30 and December 31.Lane elects a fiscal year ending September 30.What is the amount that would be recorded as cash paid in the December 31,2010 journal entry?

The effective interest method yields increasing amounts of bond interest expense and decreasing amount of premium amortization over the life of the bond .

A company can reserve the right to retire bonds before their maturity date by issuing _______________ bonds.

A company must repay the bank $10,000 cash in 3 years for a loan.The loan agreement specifies 8% interest compounded annually.The present value factor for 3 years at 8% is 0.7938.The present value of the loan is:

On January 1,2010,Timley issues 2,200,000 of 6%,12-year bonds at a price of 105½ that pay interest semi-annually.The straight-line method is used to amortize any bond discount.What is the journal entry to record the issuance of the bonds on January 1,2010?

A discount on bonds payable:

A _______________________ is a contractual agreement between an employer and its employees for the employer to provide benefits (payments)to employees after they retire.

A discount on bonds payable occurs when a company issues bonds with an issue price less than par value.

A company issued 5-year,7% bonds with a par value of $100,000.The company received $97,947 for the bonds.Using the straight-line method,the amount of interest expense for the first semiannual interest period is:

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing 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

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

Filters

Exam 10: Reporting and Analyzing Long-Term Liabilities

_______________ bonds have specific assets of the issuing company pledged as collateral.

A company issues at par 7% bonds with a par value of $500,000 on June 1,which is 5 months after the most recent interest date.How much total cash interest is received on May 1 by the bond issuer?

When the bond contract rate of interest is above the market rate of interest for that bond,the bond sells at a _____________.

A company issues 9%,20-year bonds with a par value of $750,000.The current market rate is 9%.The amount of interest owed to the bondholders for each semiannual interest payment is.

The debt to equity ratio is calculated by dividing total company's liabilities by the company's total assets.

A company enters into an agreement to make 5 annual year-end payments of $3,000 each,which will being one year from now.The annual interest rate is 6%.The present value of an annuity factor for 5 periods,6% is 4.2124.What is the present value of these five payments?

How are bond issue prices determined?

On January 1,2010,Lane issues $700,000 of 7%,15-year bonds at a price of 106 3/4.The interest payments are made on June 30 and December 31.Lane elects a fiscal year ending September 30.What is the amount that would be recorded as Interest Expense in the December 31,2010 journal entry?

On January 1,2010,Lane issues $700,000 of 7%,15-year bonds at a price of 106 3/4.The interest payments are made on June 30 and December 31.Lane elects a fiscal year ending September 30.What is the amount that would be recorded as cash paid in the December 31,2010 journal entry?

The effective interest method yields increasing amounts of bond interest expense and decreasing amount of premium amortization over the life of the bond .

A company can reserve the right to retire bonds before their maturity date by issuing _______________ bonds.

A company must repay the bank $10,000 cash in 3 years for a loan.The loan agreement specifies 8% interest compounded annually.The present value factor for 3 years at 8% is 0.7938.The present value of the loan is:

On January 1,2010,Timley issues 2,200,000 of 6%,12-year bonds at a price of 105½ that pay interest semi-annually.The straight-line method is used to amortize any bond discount.What is the journal entry to record the issuance of the bonds on January 1,2010?

A discount on bonds payable:

A _______________________ is a contractual agreement between an employer and its employees for the employer to provide benefits (payments)to employees after they retire.

A discount on bonds payable occurs when a company issues bonds with an issue price less than par value.

A company issued 5-year,7% bonds with a par value of $100,000.The company received $97,947 for the bonds.Using the straight-line method,the amount of interest expense for the first semiannual interest period is:

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing 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

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

Filters