Question 1

The present value of a bond is always less than the face value of the bond.

Accepted Answer

A) True 
 B)False

Question 2

When the straight-line method of amortization is used for a bond premium,the amount of interest expense for an interest period is calculated by

Accepted Answer

A) adding the amount of premium amortization for the period to the amount of cash paid for interest during the period. 
B) deducting the amount of premium amortization for the period from the amount of cash paid for interest during the period. 
C) multiplying the carrying value of the bonds by the effective interest rate. 
D) multiplying the face value of the bonds by the face interest rate. 
A) adding the amount of premium amortization for the period to the amount of cash paid for interest during the period. 
B) deducting the amount of premium amortization for the period from the amount of cash paid for interest during the period. 
C) multiplying the carrying value of the bonds by the effective interest rate. 
D) multiplying the face value of the bonds by the face interest rate.

Question 3

A bond premium has the effect of

Accepted Answer

A) lowering the carrying value of the bond. 
B) raising the effective interest rate above the face interest rate. 
C) increasing the amount of cash paid for interest each six months. 
D) lowering the effective interest rate below the face interest rate. 
A) lowering the carrying value of the bond. 
B) raising the effective interest rate above the face interest rate. 
C) increasing the amount of cash paid for interest each six months. 
D) lowering the effective interest rate below the face interest rate.

Question 4

The responsibility for receiving the proper amount of interest falls on the bondholder most heavily in the case of

Accepted Answer

A) term bonds. 
B) serial bonds. 
C) coupon bonds. 
D) registered bonds. 
A) term bonds. 
B) serial bonds. 
C) coupon bonds. 
D) registered bonds.

Question 5

When the terms of a lease require that the lessee record an asset and a liability,the two accounts are recorded at the present value of the total lease payments required.

Accepted Answer

A) True 
 B)False

Question 6

Any unamortized bond discount should be reported on the balance sheet of the issuing corporation as a(n)

Accepted Answer

A) asset. 
B) direct deduction from retained earnings in the stockholders' equity section. 
C) addition to the face amount of the bonds in the liability section. 
D) direct deduction from the face amount of the bonds in the liability section. 
A) asset. 
B) direct deduction from retained earnings in the stockholders' equity section. 
C) addition to the face amount of the bonds in the liability section. 
D) direct deduction from the face amount of the bonds in the liability section.

The present value of a bond is always less than the face value of the bond.

When the straight-line method of amortization is used for a bond premium,the amount of interest expense for an interest period is calculated by

A bond premium has the effect of

The responsibility for receiving the proper amount of interest falls on the bondholder most heavily in the case of

When the terms of a lease require that the lessee record an asset and a liability,the two accounts are recorded at the present value of the total lease payments required.

Any unamortized bond discount should be reported on the balance sheet of the issuing corporation as a(n)

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis and Capital Budgeting

Filters

Exam 14: Long Term Liabilities

The present value of a bond is always less than the face value of the bond.

When the straight-line method of amortization is used for a bond premium,the amount of interest expense for an interest period is calculated by

A bond premium has the effect of

The responsibility for receiving the proper amount of interest falls on the bondholder most heavily in the case of

When the terms of a lease require that the lessee record an asset and a liability,the two accounts are recorded at the present value of the total lease payments required.

Any unamortized bond discount should be reported on the balance sheet of the issuing corporation as a(n)

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis and Capital Budgeting

Filters