Exam 20: Corporations and Bonds Payable

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transactions. -Issued bonds at a value above face value in exchange for land. Debit ________ Credit ________ & ________

Moab Corporation sells $600,000 of 7%, 20-year bonds for 98 on January 1. Interest is paid on January 1 and July 1. Straight-line amortization is used. What is the amount of the discount at issuance?

Assume the following account balances immediately after an interest payment date: If the bonds are retired immediately at a total cost of $207,000, the journal entry to record this event is:

A long-term investment established to pay off bondholders at maturity is called a(n):

Control Corporation issued $390,000 of 10%, 10-year bonds for 102. The entry to record the issuance of the bonds includes a:

At year end there was no accrual of interest on a bond payable. This error would cause:

A bond sinking fund is a:

When the maturities of a bond issue are spread over a several dates, the bonds are called:

A discount bond's ________ increases over time until it reaches face value.

A $200,000, 10% bond issue was sold at face value and later redeemed at 109. The corporation would have a:

For a corporation, a premium on bonds results when:

When the total amount of a bond issue matures at a certain date at which time the bondholder can convert into shares of stock, the bonds are called callable bonds.

Bonds are long-term interest-bearing notes issued to multiple lenders, usually in increments of $1,000.

Bonds that are unsecured and are issued only on the general credit of a corporation are called ________ bonds.

One reason a corporation might issue bonds rather than selling stock is that:

The journal entry to establish a bond sinking fund would include:

When the amount received for the bond is less than the face value, the difference is written off over time in an account called Premium on Bonds Payable.

Which of the following best describes the term maturity date?

When a bond is sold at a discount, the person buying the bond receives less interest than if the bond had been purchased at face value.

The interest paid to bondholders is determined by: