Question 1

Retained Earnings Appropriated for Bond Retirement appears as a separate line item

Accepted Answer

A) on the Income Statement. 
B) on the Balance Sheet. 
C) on the Bond Interest Reconciliation Schedule. 
D) on the Statement of Cash Flows. 
A) on the Income Statement. 
B) on the Balance Sheet. 
C) on the Bond Interest Reconciliation Schedule. 
D) on the Statement of Cash Flows.

Question 2

What is the early retirement of bonds? There are two ways that the early retirement of bonds can come about? What are they?

Accepted Answer

Retirement of bonds occurs at the maturi

Question 3

A company issued 6%, 10 year bonds with a par value of $500,000 on April 1. Interest is payable each Sept. 30 and March 31,2019. The journal entry to accrue interest expense as of December 31,2019, is:

Accepted Answer

A) 
  
B) 
  
C) 
  
D)  
  
A) 
  
B) 
  
C) 
  
D)

Question 4

Compare convertible and callable bonds by listing their characteristics in the following format.
Convertible Bonds Callable Bonds

Accepted Answer

Convertible Bonds Callable Bonds
Bondhol

Question 5

When bonds are sold at a market price of 105, the cash received for the bonds is 105 percent of the bonds' face value.

Accepted Answer

A) True 
 B)False

Question 6

A bond is----------- if the issuing corporation has the right to require the owner to surrender the bond for payment before the maturity date.

Accepted Answer

The answer of A bond is----------- if the issuing corporation...

Question 7

On December 31, 2019, a corporation issued $180,000 face value, 8 percent bonds that mature 10 years from the date of issue. The issue price was 98. If the firm uses the straight-line method of amortization, interest expense for 2020 will be reported at

Accepted Answer

A) $18,000. 
B) $24,000. 
C) $14,040. 
D) $14,760. 
E)  $14,400. 
A) $18,000. 
B) $24,000. 
C) $14,040. 
D) $14,760. 
E)  $14,400.

Question 8

When bonds are issued at a price below face value, the Discount on Bonds Payable account is debited for the difference between the issue price and the face value.

Accepted Answer

A) True 
 B)False

Question 9

On December 31, 2019, a corporation issued $180,000 face value, 8 percent bonds that mature 10 years from the date of issue. The issue price was 104. If the firm uses the straight-line method of amortization, interest expense for 2020 will be reported at

Accepted Answer

A) $13,680. 
B) $15,120. 
C) $14,400. 
D) $7,200. 
A) $13,680. 
B) $15,120. 
C) $14,400. 
D) $7,200.

Question 10

The IRS requires companies to issue coupon bonds in order to track taxable interest payments made to the bond holders.

Accepted Answer

A) True 
 B)False

Question 11

When a corporation pays the periodic interest payment on its bonds, Bond Interest Expense is debited.

Accepted Answer

A) True 
 B)False

Question 12

A company has $500,000 in equity and income before interest and taxes of $50,000. The corporate tax rate is 25 percent. If $200,000 of bonds are issued at 10 percent, what is the rate of profit on stockholders' equity?

Accepted Answer

A) 10.0%. 
B) 7)7%. 
C) 6)0%. 
D) 4)5%. 
A) 10.0%. 
B) 7)7%. 
C) 6)0%. 
D) 4)5%.

Question 13

The Bonds Payable account would be credited for $104,000 to record the issuance of $100,000 face value, 10 percent bonds at a market price of 104.

Accepted Answer

A) True 
 B)False

Question 14

The adjusting entry for Barstow Corporation on September 30, 2019 (the end of the fiscal year)to accrue three months of bond interest due is as follows. Interest is paid on June 30 an December 31.
 
Make the entry to reverse this accrual. Include the proper date for the entry.

Accepted Answer

The answer of The adjusting entry for Barstow Corporation on...

Question 15

On September 1, 2019, a corporation paid $610,000 to retire bonds with a face value of $600,000 and an unamortized bond discount of $18,000. Record the transaction on page 8 of a general journal. Omit the description.

Accepted Answer

The answer of On September 1, 2019, a corporation paid...

Question 16

Match between columns
                        Premises: A bond contract
Long-term debt instruments
The removal of the bond liability from the company's books when paid
The book value of bonds (principal plus premium or principal less discount)
Bonds secured by the pledge of securities (i.e., stocks, bonds of another company)
Cost incurred in issuing bonds (i.e., legal and accounting fees, printing costs)
Bearer bonds
Bonds that allow the issuing corporation to retire the bonds prior to their maturity date
Bonds that give the bondholder the right to exchange their bonds for common stock under specified conditions
A fund established for the purpose of putting cash in to pay off bonds when due

Accepted Answer

The Answer of Bond issue costs and Coupon bonds and is...

Question 17

The Discount on Bonds Payable account will have a(n)----------balance.

Accepted Answer

The answer of The Discount on Bonds Payable account will...

Question 18

Bonds with a face value of $200,000 were issued at 103. The entry to record the issuance will include a credit to the Bonds Payable account for

Accepted Answer

A) $206,000. 
B) $103,000. 
C) $200,000. 
D) $230,000. 
A) $206,000. 
B) $103,000. 
C) $200,000. 
D) $230,000.

Question 19

Lee Corporation has 10-year, 12% bonds payable of $100,000 that were sold on January 2, 2019 at a premium of $15,000. The amortization on the premium is recorded at the end of every year. Determine the Balance Sheet presentation of these bonds at December 31, 2021. (Present only the section of the Balance Sheet in which the bonds appear.)

Accepted Answer

The answer of Lee Corporation has 10-year, 12% bonds payable...

Question 20

Corporations with many bondholders will open a separate checking account because

Accepted Answer

A) it is required by law. 
B) the account earns interest. 
C) it is easier to do the bookkeeping on the bond interest. 
D) it keeps the bond interest records separate for tax purposes. 
A) it is required by law. 
B) the account earns interest. 
C) it is easier to do the bookkeeping on the bond interest. 
D) it keeps the bond interest records separate for tax purposes.

Exam 22: Long-Term Bonds

Retained Earnings Appropriated for Bond Retirement appears as a separate line item

What is the early retirement of bonds? There are two ways that the early retirement of bonds can come about? What are they?

A company issued 6%, 10 year bonds with a par value of $500,000 on April 1. Interest is payable each Sept. 30 and March 31,2019. The journal entry to accrue interest expense as of December 31,2019, is:

Compare convertible and callable bonds by listing their characteristics in the following format. Convertible Bonds Callable Bonds

When bonds are sold at a market price of 105, the cash received for the bonds is 105 percent of the bonds' face value.

A bond is----------- if the issuing corporation has the right to require the owner to surrender the bond for payment before the maturity date.

On December 31, 2019, a corporation issued $180,000 face value, 8 percent bonds that mature 10 years from the date of issue. The issue price was 98. If the firm uses the straight-line method of amortization, interest expense for 2020 will be reported at

When bonds are issued at a price below face value, the Discount on Bonds Payable account is debited for the difference between the issue price and the face value.

On December 31, 2019, a corporation issued $180,000 face value, 8 percent bonds that mature 10 years from the date of issue. The issue price was 104. If the firm uses the straight-line method of amortization, interest expense for 2020 will be reported at

The IRS requires companies to issue coupon bonds in order to track taxable interest payments made to the bond holders.

When a corporation pays the periodic interest payment on its bonds, Bond Interest Expense is debited.

A company has $500,000 in equity and income before interest and taxes of $50,000. The corporate tax rate is 25 percent. If $200,000 of bonds are issued at 10 percent, what is the rate of profit on stockholders' equity?

The Bonds Payable account would be credited for $104,000 to record the issuance of $100,000 face value, 10 percent bonds at a market price of 104.

The adjusting entry for Barstow Corporation on September 30, 2019 (the end of the fiscal year)to accrue three months of bond interest due is as follows. Interest is paid on June 30 an December 31. Make the entry to reverse this accrual. Include the proper date for the entry.

On September 1, 2019, a corporation paid $610,000 to retire bonds with a face value of $600,000 and an unamortized bond discount of $18,000. Record the transaction on page 8 of a general journal. Omit the description.

The Discount on Bonds Payable account will have a(n)----------balance.

Bonds with a face value of $200,000 were issued at 103. The entry to record the issuance will include a credit to the Bonds Payable account for

Corporations with many bondholders will open a separate checking account because

Accounting: The Language of Business

Analyzing Business Transactions

Analyzing Business Transactions Using T Accounts

The General Journal and the General Ledger

Adjustments and the Worksheet

Closing Entries and Teh Postclosing Trial Balance

Accounting for Sales and Accounts Receivable

Accounting for Purchases and Accounts Payable

Cash Receipts, Cash Payments, and Banking Procedures

Payroll Computations, Records, and Payment

Payroll Taxes, Deposits, and Reports

Accruals, Deferrals, and the Worksheet

Financial Statements and Closing Procedures

Accounting Principles and Reporting Standards

Accounts Receivable and Uncollectible Accounts

Notes Payable and Notes Receivable

Merchandise Inventory

Property, Plant, and Equipment

Accounting for Partnerships

Corporations: Formation and Capital Stock Transactions

Corporate Earnings and Capital Transactions

Financial Statement Analysis

The Statement of Cash Flows

Departmentalized Profit and Cost Centers

Accounting for Manufacturing Activities

Job Order Cost Accounting

Process Cost Accounting

Controlling Manufacturing Costs: Standard Costs

Cost-Revenue Analysis for Decision Making

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