Exam 14: Long Term Liabilities

An adjustment must be made at the end of an accounting period to accrue the interest expense on bonds payable and to amortize any related premium or discount from the last interest payment date to the end of the fiscal year.

The callable feature of a bond can be exercised by the bondholder.

The amortization of a bond discount will result in reporting an amount of interest expense for an interest period that

Market interest rate is another term for effective interest rate.

When bonds are converted to common stock,which of the following could be part of the entry?

On March 1,20x5,Darby Corporation sold 102 of its 9 percent,$1,000 bonds for a price of 96 plus accrued interest.The accrued interest amounted to $1,000.If a balance sheet were to be prepared at the end of the day,March 1,20x5,the carrying value reported for the bonds payable would be

Peng Corporation has been authorized to issue bonds with interest payment dates of March 1 and September 1.If the bonds are sold at face amount on April 1,the amount of cash to be received by the issuer is equal to the face amount of the bonds

On January 2,20x5,Barham Corporation issued ten-year bonds payable with a face value of $400,000 and a face interest rate of 9 percent.The bonds were issued to yield a market interest rate of 10 percent.Interest is payable semiannually on January 2 and July 1.In calculating the present value of the bond issue on January 2,20x5,

Weller Co.issued $600,000 of 30-year,8 percent bonds at 106 on one of its semiannual interest dates.The straight-line method of amortization is to be used.What is the total interest cost of the bonds?

Comment on the change in both the carrying value and the balance of the Unamortized Bond Premium account over the life of a bond issue.

A $50,000 bond issue with a carrying value of $47,000 is called at 102 and retired.The entry to record the retirement of bonds is:

Which of the following is not considered a long-term obligation?

When fixed mortgage payments are made,in what way does the interest portion change each month,and why?

Which of the following qualifies as a capital lease?

Bonds that mature in installments are called

The par value of a bond is equal to its face value.

A $200,000 bond issue with a carrying value of $206,000 is called at 101 and retired.The entry to record the retirement of bonds is:

If a bond has a face interest rate of 6 percent,a face value of $40,000,and pays interest semiannually,each interest payment will amount to $1,200.

Which of the following is an example of off-balance-sheet financing?

On March 1,20x5,King Corp.sold 102 of its 9 percent,$1,000 bonds for a price of 102 plus accrued interest.The accrued interest amounted to $800.If a balance sheet were to be prepared at the end of the day,March 1,20x5,the carrying value reported for the bonds payable would be