A) Require the issuer to set aside assets to pay 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 to pay 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 10: Accounting for Long-Term Liabilities

A company issued 10-year,7% bonds with a par value of $100,000.The company received $96,526 for the bonds.Using the straight-line method,the amount of interest expense for the first semiannual interest period is:

(Multiple Choice)

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Question 121

Describe the journal entries required to record the issuance of bonds at a premium and the payment of bond interest,including any applicable amortization.

(Essay)

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Question 122

A company issues 9%,5-year bonds with a par value of $100,000 on January 1 at a price of $106,160,when the market rate of interest was 8%.The bonds pay interest semiannually.The amount of each semiannual interest payment is:

(Multiple Choice)

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Question 123

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

(True/False)

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Question 124

Collateral agreements for a note or bond can:

(Multiple Choice)

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Question 125

How are bond issue prices determined?

(Essay)

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Question 126

The debt-to-equity ratio enables financial statement users to assess the risk of a company's financing structure.

(True/False)

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Question 127

A company with a low level of liabilities in relation to stockholders' equity is likely to have a very high debt-to-equity ratio.

(True/False)

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Question 128

A company borrows $10,000 and issues a 5-year,6% installment note with interest payable annually.The factor for the present value of an annuity at 6% for 5 years is 4.2124.The factor for the present value of a single sum at 6% for 5 years is 0.7473.The present value of the interest payments is $2,527.44.

(True/False)

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Question 129

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)

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Question 130

What is a lease? Explain the difference between an operating lease and a finance lease.

(Essay)

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Question 131

________ leases are long-term leases that do not meet any of the five criteria for finance leases.

(Short Answer)

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Question 132

Sharmer Company issues 5%,5-year bonds with a par value of $1,000,000 and semiannual interest payments.On the issue date,the annual market rate for these bonds is 6%.What is the bond's issue (selling)price,assuming the following factors:

(Multiple Choice)

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Question 133

A discount on bonds payable:

(Multiple Choice)

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Question 134

Mandarin Company has 9%,20-year bonds outstanding with a par value of $500,000 and a carrying value of $475,000.The company calls the bonds at $482,000.Calculate the gain or loss on the retirement of these bonds.

(Essay)

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Question 135

A company has bonds outstanding with a par value of $100,000.The unamortized discount on these bonds is $4,500.The company calls these bonds at a price of $97,000,the gain or loss on retirement is:

(Multiple Choice)

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Question 136

Premium on Bonds Payable is an adjunct liability account,as it increases the carrying value of the bond.

(True/False)

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Question 137

A company has total assets of $350,000 and total liabilities of $200,000.Its debt-to-equity ratio is 0.6.

(True/False)

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Question 138

On January 1,a company issued and sold a $400,000,7%,10-year bond payable,and received proceeds of $396,000.Interest is payable each June 30 and December 31.The company uses the straight-line method to amortize the discount.The carrying value of the bonds immediately after the second interest payment is:

(Multiple Choice)

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Question 139

Sinking fund bonds:

(Multiple Choice)

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Question 140

Showing 121 - 140 of 231

Exam 10: Accounting for Long-Term Liabilities

A company issued 10-year,7% bonds with a par value of $100,000.The company received $96,526 for the bonds.Using the straight-line method,the amount of interest expense for the first semiannual interest period is:

Describe the journal entries required to record the issuance of bonds at a premium and the payment of bond interest,including any applicable amortization.

A company issues 9%,5-year bonds with a par value of $100,000 on January 1 at a price of $106,160,when the market rate of interest was 8%.The bonds pay interest semiannually.The amount of each semiannual interest payment is:

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

Collateral agreements for a note or bond can:

How are bond issue prices determined?

The debt-to-equity ratio enables financial statement users to assess the risk of a company's financing structure.

A company with a low level of liabilities in relation to stockholders' equity is likely to have a very high debt-to-equity ratio.

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:

What is a lease? Explain the difference between an operating lease and a finance lease.

________ leases are long-term leases that do not meet any of the five criteria for finance leases.

Sharmer Company issues 5%,5-year bonds with a par value of $1,000,000 and semiannual interest payments.On the issue date,the annual market rate for these bonds is 6%.What is the bond's issue (selling)price,assuming the following factors:

A discount on bonds payable:

Mandarin Company has 9%,20-year bonds outstanding with a par value of $500,000 and a carrying value of $475,000.The company calls the bonds at $482,000.Calculate the gain or loss on the retirement of these bonds.

A company has bonds outstanding with a par value of $100,000.The unamortized discount on these bonds is $4,500.The company calls these bonds at a price of $97,000,the gain or loss on retirement is:

Premium on Bonds Payable is an adjunct liability account,as it increases the carrying value of the bond.

A company has total assets of $350,000 and total liabilities of $200,000.Its debt-to-equity ratio is 0.6.

Sinking fund bonds:

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