Question 1

When a company issues bonds between interest dates the entry to record the issuance of the bonds will:

Accepted Answer

A) Include a debit to cash that has been reduced by accrued interest from the last interest date. 
B) Include a credit to accrued interest payable. 
C) Include a debit to interest expense. 
D) Be unaffected by the timing of issue. 
A) Include a debit to cash that has been reduced by accrued interest from the last interest date. 
B) Include a credit to accrued interest payable. 
C) Include a debit to interest expense. 
D) Be unaffected by the timing of issue.

Question 2

Ordinarily,the proceeds from the sale of a bond issue will be equal to:

Accepted Answer

A) The face amount of the bond. 
B) The total of the face amount plus all interest payments. 
C) The present value of the face amount plus the present value of the stream of interest payments. 
D) The face amount of the bond plus the present value of the stream of interest payments. 
A) The face amount of the bond. 
B) The total of the face amount plus all interest payments. 
C) The present value of the face amount plus the present value of the stream of interest payments. 
D) The face amount of the bond plus the present value of the stream of interest payments.

Question 3

Bonds payable should be reported as a long-term liability in the balance sheet of the issuing corporation at the:

Accepted Answer

A) Face amount price less any unamortized discount or plus any unamortized premium. 
B) Current bond market price. 
C) Face amount less any unamortized premium or plus any unamortized discount. 
D) Face amount less accrued interest since the last interest payment date. 
A) Face amount price less any unamortized discount or plus any unamortized premium. 
B) Current bond market price. 
C) Face amount less any unamortized premium or plus any unamortized discount. 
D) Face amount less accrued interest since the last interest payment date.

Question 4

The interest expense on an installment note decreases with each periodic payment.

Accepted Answer

A) True 
 B)False

Question 5

Auerbach issued the bonds:

Accepted Answer

A) At par. 
B) At a premium. 
C) At a discount. 
D) Cannot be determined from the given information. 
A) At par. 
B) At a premium. 
C) At a discount. 
D) Cannot be determined from the given information.

Question 6

Liberty Company issued 10-year bonds at 105 during the current year.In the year-end financial statements,the premium should be:

Accepted Answer

A) Reported as an intangible asset. 
B) Included in revenue for the year of sale. 
C) Deducted from bonds payable. 
D) Added to bonds payable. 
A) Reported as an intangible asset. 
B) Included in revenue for the year of sale. 
C) Deducted from bonds payable. 
D) Added to bonds payable.

Question 7

When bonds are sold at a discount,if the annual straight-line amortization amount is compared to the annual effective interest amortization amount over the life of the bond issue,the annual amount of the straight-line amortization of discount is:

Accepted Answer

A) Higher than the effective interest amount every year. 
B) Higher than the effective interest amount in the early years and less than the effective interest amount in the later years. 
C) Less than the effective interest amount in the early years and more than the effective interest amount in the later years. 
D) Less than the effective interest amount every year. 
A) Higher than the effective interest amount every year. 
B) Higher than the effective interest amount in the early years and less than the effective interest amount in the later years. 
C) Less than the effective interest amount in the early years and more than the effective interest amount in the later years. 
D) Less than the effective interest amount every year.

Question 8

Companies are not required to,but have the option to,value some or all of their financial assets and liabilities at fair value.

Accepted Answer

A) True 
 B)False

Question 9

Most corporate bonds are:

Accepted Answer

A) Mortgage bonds. 
B) Debenture bonds. 
C) Secured bonds. 
D) Collateral bonds. 
A) Mortgage bonds. 
B) Debenture bonds. 
C) Secured bonds. 
D) Collateral bonds.

Question 10

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the most correct term.

Accepted Answer

The answer of Listed below are 5 terms followed by...

Question 11

On March 1,2016,E Corp.issued $1,000,000 of 10% nonconvertible bonds at 103,due on February 28,2026.Each $1,000 bond was issued with 30 detachable stock warrants,each of which entitled the holder to purchase,for $50,one share of Evan's $25 par common stock.On March 1,2016,the market price of each warrant was $4.By what amount should the bond issue proceeds increase shareholders' equity?

Accepted Answer

A) $ 0. 
B) $ 30,000. 
C) $ 90,000. 
D) $120,000. 
A) $ 0. 
B) $ 30,000. 
C) $ 90,000. 
D) $120,000.

Question 12

Use the following to answer questions 
Lopez Plastics Co.(LPC)issued callable bonds on January 1,2016.LPC's accountant has projected the following amortization schedule from issuance until maturity:
  
-LPC issued the bonds:

Accepted Answer

A) At par. 
B) At a premium. 
C) At a discount. 
D) Cannot be determined from the given information. 
A) At par. 
B) At a premium. 
C) At a discount. 
D) Cannot be determined from the given information.

Question 13

Why do companies find the issuance of convertible bonds to be an attractive form of financing?

Accepted Answer

Convertible debt securities are attracti

Question 14

What is the stated annual rate of interest on the bonds?

Accepted Answer

A) 3%. 
B) 4%. 
C) 6%. 
D) 8%. 
A) 3%. 
B) 4%. 
C) 6%. 
D) 8%.

Question 15

Determine the price of a $200,000 bond issue under each of the following independent assumptions:

Accepted Answer

The answer of Determine the price of a $200,000 bond...

Question 16

Distinguish between:
(a)Convertible and callable bonds.
(b)Serial and term bonds.

Accepted Answer

(a)Convertible bonds may be exchanged fo

Question 17

Straight-line amortization of bond discount or premium:

Accepted Answer

A) Can be used for amortization of discount or premium in all cases and circumstances. 
B) Provides the same amount of interest expense each period as does the effective interest method. 
C) Is appropriate for deep discount bonds. 
D) Provides the same total amount of interest expense over the life of the bond issue as does the effective interest method. 
A) Can be used for amortization of discount or premium in all cases and circumstances. 
B) Provides the same amount of interest expense each period as does the effective interest method. 
C) Is appropriate for deep discount bonds. 
D) Provides the same total amount of interest expense over the life of the bond issue as does the effective interest method.

Question 18

The market price of a bond issued at a discount is the present value of its principal amount at the market (effective)rate of interest:

Accepted Answer

A) Less the present value of all future interest payments at the rate of interest stated on the bond. 
B) Plus the present value of all future interest payments at the rate of interest stated on the bond. 
C) Plus the present value of all future interest payments at the market (effective)rate of interest. 
D) Less the present value of all future interest payments at the market (effective)rate of interest. 
A) Less the present value of all future interest payments at the rate of interest stated on the bond. 
B) Plus the present value of all future interest payments at the rate of interest stated on the bond. 
C) Plus the present value of all future interest payments at the market (effective)rate of interest. 
D) Less the present value of all future interest payments at the market (effective)rate of interest.

Question 19

Premium on bonds payable is a contra liability account.

Accepted Answer

A) True 
 B)False

Question 20

Use the following to answer questions 
Lopez Plastics Co.(LPC)issued callable bonds on January 1,2016.LPC's accountant has projected the following amortization schedule from issuance until maturity:
  
-What is the annual stated interest rate on the bonds?

Accepted Answer

A) 3.5% 
B) 6% 
C) 7% 
D) None of the answer choices is correct. 
A) 3.5% 
B) 6% 
C) 7% 
D) None of the answer choices is correct.

When a company issues bonds between interest dates the entry to record the issuance of the bonds will:

Ordinarily,the proceeds from the sale of a bond issue will be equal to:

Bonds payable should be reported as a long-term liability in the balance sheet of the issuing corporation at the:

The interest expense on an installment note decreases with each periodic payment.

Auerbach issued the bonds:

Liberty Company issued 10-year bonds at 105 during the current year.In the year-end financial statements,the premium should be:

When bonds are sold at a discount,if the annual straight-line amortization amount is compared to the annual effective interest amortization amount over the life of the bond issue,the annual amount of the straight-line amortization of discount is:

Companies are not required to,but have the option to,value some or all of their financial assets and liabilities at fair value.

Most corporate bonds are:

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the most correct term.

Use the following to answer questions Lopez Plastics Co.(LPC)issued callable bonds on January 1,2016.LPC's accountant has projected the following amortization schedule from issuance until maturity: -LPC issued the bonds:

Why do companies find the issuance of convertible bonds to be an attractive form of financing?

What is the stated annual rate of interest on the bonds?

Determine the price of a $200,000 bond issue under each of the following independent assumptions:

Distinguish between: (a)Convertible and callable bonds. (b)Serial and term bonds.

Straight-line amortization of bond discount or premium:

The market price of a bond issued at a discount is the present value of its principal amount at the market (effective)rate of interest:

Premium on bonds payable is a contra liability account.

Use the following to answer questions Lopez Plastics Co.(LPC)issued callable bonds on January 1,2016.LPC's accountant has projected the following amortization schedule from issuance until maturity: -What is the annual stated interest rate on the bonds?

Environment and Theoretical Structure of Financial Accounting

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, comprehensive Income, and the Statement of Cash Flows

Income Measurement

Time Value of Money Concepts

Cash and Receivables

Inventories: Measurement

Inventories: Additional Issues

Property, plant, and Equipment and Intangible Assets: Acquisition and Disposition

Property, plant, and Equipment and Intangible Assets: Utilization and Impairment

Investments

Current Liabilities and Contingencies

Leases

Accounting for Income Taxes

Pensions and Other Postretirement Benefits

Shareholders Equity

Share-Based Compensation and Earnings Per Share

Accounting Changes

The Statement of Cash Flows

Filters

Exam 14: Bonds and Long-Term Notes

When a company issues bonds between interest dates the entry to record the issuance of the bonds will:

Ordinarily,the proceeds from the sale of a bond issue will be equal to:

Bonds payable should be reported as a long-term liability in the balance sheet of the issuing corporation at the:

The interest expense on an installment note decreases with each periodic payment.

Auerbach issued the bonds:

Liberty Company issued 10-year bonds at 105 during the current year.In the year-end financial statements,the premium should be:

When bonds are sold at a discount,if the annual straight-line amortization amount is compared to the annual effective interest amortization amount over the life of the bond issue,the annual amount of the straight-line amortization of discount is:

Companies are not required to,but have the option to,value some or all of their financial assets and liabilities at fair value.

Most corporate bonds are:

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the most correct term.

Use the following to answer questions Lopez Plastics Co.(LPC)issued callable bonds on January 1,2016.LPC's accountant has projected the following amortization schedule from issuance until maturity: -LPC issued the bonds:

Why do companies find the issuance of convertible bonds to be an attractive form of financing?

What is the stated annual rate of interest on the bonds?

Determine the price of a $200,000 bond issue under each of the following independent assumptions:

Distinguish between: (a)Convertible and callable bonds. (b)Serial and term bonds.

Straight-line amortization of bond discount or premium:

The market price of a bond issued at a discount is the present value of its principal amount at the market (effective)rate of interest:

Premium on bonds payable is a contra liability account.

Use the following to answer questions Lopez Plastics Co.(LPC)issued callable bonds on January 1,2016.LPC's accountant has projected the following amortization schedule from issuance until maturity: -What is the annual stated interest rate on the bonds?

Environment and Theoretical Structure of Financial Accounting

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, comprehensive Income, and the Statement of Cash Flows

Income Measurement

Time Value of Money Concepts

Cash and Receivables

Inventories: Measurement

Inventories: Additional Issues

Property, plant, and Equipment and Intangible Assets: Acquisition and Disposition

Property, plant, and Equipment and Intangible Assets: Utilization and Impairment

Investments

Current Liabilities and Contingencies

Leases

Accounting for Income Taxes

Pensions and Other Postretirement Benefits

Shareholders Equity

Share-Based Compensation and Earnings Per Share

Accounting Changes

The Statement of Cash Flows

Filters