A) Is a contractual agreement between an employer and its employees in which the employer provides benefits to employees after they retire. B) Can be underfunded if the plan assets are more than the accumulated benefit obligation. C) Is always funded fully by employers. D) Can be a defined benefit plan or an undefined benefit plan. E) Is the same as Other Postretirement Benefits. A) Is a contractual agreement between an employer and its employees in which the employer provides benefits to employees after they retire. B) Can be underfunded if the plan assets are more than the accumulated benefit obligation. C) Is always funded fully by employers. D) Can be a defined benefit plan or an undefined benefit plan. E) Is the same as Other Postretirement Benefits.

A) Require the issuer to set aside assets at specified amounts 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 at specified amounts 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.

Exam 14: Long-Term Liabilities

A company purchased equipment and signed a 7-year installment loan at 9% annual interest.The annual payments equal $9,000.The present value of an annuity factor for 7 years at 9% is 5.0330.The present value of the loan is:

(Multiple Choice)

4.7/5

(82)

Question 61

The Premium on Bonds Payable account is a(n):

(Multiple Choice)

4.7/5

(85)

Question 62

Collateral agreements for a note or bond can:

(Multiple Choice)

4.8/5

(83)

Question 63

A company issued 5-year,7% bonds with a par value of $100,000.The market rate when the bonds were issued was 6.5%.The company received $102,105 cash for the bonds.Using the straight-line method,the amount of recorded interest expense for the first semiannual interest period is:

(Multiple Choice)

4.9/5

(78)

Question 64

A contract pledging title to assets as security for a note or bond is known as a(an):

(Multiple Choice)

4.7/5

(75)

Question 65

On January 1,a company issues bonds dated January 1 with a par value of $300,000.The bonds mature in 5 years.The contract rate is 9%,and interest is paid semiannually on June 30 and December 31.The market rate is 8% and the bonds are sold for $312,177.The journal entry to record the issuance of the bond is:

(Multiple Choice)

4.8/5

(79)

Question 66

A pension plan:

(Multiple Choice)

4.8/5

(71)

Question 67

A disadvantage of bond financing over equity financing is the burden on the cash flows of the company.

(True/False)

4.8/5

(81)

Question 68

On January 1 of Year 1,Congo Express Airways issued $3,500,000 of 7%,bonds that pay interest semiannually on January 1 and July 1.The bond issue price is $3,197,389 and the market rate of interest for similar bonds is 8%.The bond premium or discount is being amortized using the straight-line method at a rate of $10,087 every six months.The life of these bonds is:

(Multiple Choice)

4.8/5

(64)

Question 69

On January 1,a company issues bonds dated January 1 with a par value of $400,000.The bonds mature in 5 years.The contract rate is 7%,and interest is paid semiannually on June 30 and December 31.The market rate is 8% and the bonds are sold for $383,793.The journal entry to record the first interest payment using the effective interest method of amortization is:

(Multiple Choice)

4.9/5

(66)

Question 70

The rate of interest that borrowers are willing to pay and lenders are willing to accept for a particular bond and its risk level is the ____________________ of interest.

(Essay)

4.9/5

(75)

Question 71

Sinking fund bonds:

(Multiple Choice)

4.8/5

(82)

Question 72

The ____________ concept is the idea that cash paid (or received)in the future has less value now than the same amount of cash paid (or received)today.

(Essay)

4.8/5

(83)

Question 73

A company has bonds outstanding with a par value of $100,000.The unamortized premium on these bonds is $2,700.If the company retired these bonds at a call price of 99,the gain or loss on this retirement is:

(Multiple Choice)

4.7/5

(81)

Question 74

On January 1,Year 1 Cleaver Company borrowed $85,000 cash by signing a 7% installment note that is to be repaid with 4 annual year-end payments of $25,094,the first of which is due on December 31,Year 1. (a)Prepare the company's journal entry to record the note's issuance. (b)Prepare the journal entries to record the first installment payment.

(Essay)

4.9/5

(82)

Question 75

Seedly Corporation's most recent balance sheet reports total assets of $35,000,000 and total liabilities of $17,500,000.Management is considering issuing $5,000,000 of par value bonds (at par)with a maturity date of ten years and a contract rate of 7%.What effect,if any,would issuing the bonds have on the company's debt-to-equity ratio?

(Multiple Choice)

4.8/5

(75)

Question 76

A lease is a contractual agreement between a lessor and a lessee that grants the lessee the right to use the asset for a period of time in return for cash payment(s)to the lessor.

(True/False)

5.0/5

(77)

Question 77

The carrying value of a long-term note is computed as the present value of all remaining future payments,discounted using the market rate at the time of issuance.

(True/False)

4.8/5

(85)

Question 78

Mortgage bonds are backed only by the good faith and credit of the issuing company.

(True/False)

4.9/5

(84)

Question 79

Chang Industries has bonds outstanding with a par value of $200,000 and a carrying value of $203,000.If the company calls these bonds at a price of $201,000,the gain or loss on retirement is:

(Multiple Choice)

5.0/5

(88)

Question 80

Showing 61 - 80 of 187

Exam 14: Long-Term Liabilities

A company purchased equipment and signed a 7-year installment loan at 9% annual interest.The annual payments equal $9,000.The present value of an annuity factor for 7 years at 9% is 5.0330.The present value of the loan is:

The Premium on Bonds Payable account is a(n):

Collateral agreements for a note or bond can:

A company issued 5-year,7% bonds with a par value of $100,000.The market rate when the bonds were issued was 6.5%.The company received $102,105 cash for the bonds.Using the straight-line method,the amount of recorded interest expense for the first semiannual interest period is:

A contract pledging title to assets as security for a note or bond is known as a(an):

A pension plan:

A disadvantage of bond financing over equity financing is the burden on the cash flows of the company.

The rate of interest that borrowers are willing to pay and lenders are willing to accept for a particular bond and its risk level is the ____________________ of interest.

Sinking fund bonds:

The ____________ concept is the idea that cash paid (or received)in the future has less value now than the same amount of cash paid (or received)today.

A company has bonds outstanding with a par value of $100,000.The unamortized premium on these bonds is $2,700.If the company retired these bonds at a call price of 99,the gain or loss on this retirement is:

A lease is a contractual agreement between a lessor and a lessee that grants the lessee the right to use the asset for a period of time in return for cash payment(s)to the lessor.

The carrying value of a long-term note is computed as the present value of all remaining future payments,discounted using the market rate at the time of issuance.

Mortgage bonds are backed only by the good faith and credit of the issuing company.

Chang Industries has bonds outstanding with a par value of $200,000 and a carrying value of $203,000.If the company calls these bonds at a price of $201,000,the gain or loss on retirement is:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

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