Question 1

The contract rate is also called the:

Accepted Answer

A)  Coupon rate. 
B)  Stated rate. 
C)  Nominal rate. 
D)  Interest rate. 
E)  All of these answers are correct. 
A)  Coupon rate. 
B)  Stated rate. 
C)  Nominal rate. 
D)  Interest rate. 
E)  All of these answers are correct.

Question 2

Discuss the issues in accounting for notes payable.

Accepted Answer

Notes must be accounted for at issuance.

Question 3

A corporation can reserve the right to retire bonds early by issuing _______________ bonds.

Accepted Answer

The answer of A corporation can reserve the right to...

Question 4

Discuss the difference between operating and finance leases.

Accepted Answer

Operating leases are simply rental agree

Question 5

You graphed the carrying value and par value over the life of a bond.You noticed that the carrying value is above the par value line and that the two lines meet over time.Identify the statement below that is best described by the graph you drew.

Accepted Answer

A)  The bond was issued at a premium. 
B)  Discounted interest amortization is used. 
C)  The bond was issued at a discount. 
D)  Effective interest amortization is used. 
E)  The bond was issued at par. 
A)  The bond was issued at a premium. 
B)  Discounted interest amortization is used. 
C)  The bond was issued at a discount. 
D)  Effective interest amortization is used. 
E)  The bond was issued at par.

Question 6

Kent Corporation has $100,000 in bonds outstanding.The unamortized premium on these bonds is $2,700.If the corporation redeems these bonds at 99,what is the gain (loss)on retirement?

Accepted Answer

A)  $1,000. 
B)  $(1,000). 
C)  $(2,700). 
D)  $2,700. 
E)  $3,700. 
A)  $1,000. 
B)  $(1,000). 
C)  $(2,700). 
D)  $2,700. 
E)  $3,700.

Question 7

On December 31,2015,Bumpy Corporation borrowed $80,000 by signing a 12% installment note that is to be repaid in 8 annual payments,the first of which is due on December 31,2016.

Accepted Answer

The answer of On December 31,2015,Bumpy Corporation borrowed $80,000 by...

Question 8

Discuss the retirement of bonds.

Accepted Answer

Bonds are generally retired on the matur

Question 9

The Premium on Bonds Payable account is a(n):

Accepted Answer

A)  Revenue account. 
B)  Adjunct-revenue account. 
C)  Contra revenue account. 
D)  Contra liability account. 
E)  Adjunct-liability account. 
A)  Revenue account. 
B)  Adjunct-revenue account. 
C)  Contra revenue account. 
D)  Contra liability account. 
E)  Adjunct-liability account.

Question 10

Bonds that have interest coupons attached to their certificates,which the bondholders detach when they mature and present to a bank for collection,are called:

Accepted Answer

A)  Serial bonds. 
B)  Callable bonds. 
C)  Coupon bonds. 
D)  Convertible bonds. 
E)  Registered bonds. 
A)  Serial bonds. 
B)  Callable bonds. 
C)  Coupon bonds. 
D)  Convertible bonds. 
E)  Registered bonds.

Question 11

A bond issue with a $100,000 par value,an 8% annual contract rate,with interest payable semiannually and a 10-year life means that the issuer must repay $100,000 at the end of 10 years plus make 20 payments of $4,000.

Accepted Answer

A) True 
 B)False

Question 12

Bonds with a par value of $100,000,which pay 9% annual interest and pay interest on June 30 and December 31,were sold on July 31 at par value.The issuer will receive $100,750 cash for the sale of the bond.

Accepted Answer

A) True 
 B)False

Question 13

Amortization of a bond discount:

Accepted Answer

A)  Decreases the Bonds Payable account. 
B)  Increases the Bonds Payable account. 
C)  Allocates the amount of the discount over the life of the bond. 
D)  Creates a Discount Payable account. 
E)  None of these answers is correct. 
A)  Decreases the Bonds Payable account. 
B)  Increases the Bonds Payable account. 
C)  Allocates the amount of the discount over the life of the bond. 
D)  Creates a Discount Payable account. 
E)  None of these answers is correct.

Question 14

Dawson Inc received proceeds of $206,948 on a bond issue with a par value of $200,000.The difference between par value and issue price is recorded as a:

Accepted Answer

A)  Credit to Interest Income. 
B)  Credit to Premium on Bonds Payable. 
C)  Credit to Discount on Bonds Payable. 
D)  Debit to Premium on Bonds Payable. 
E)  Debit to Discount on Bonds PayablE. 
A)  Credit to Interest Income. 
B)  Credit to Premium on Bonds Payable. 
C)  Credit to Discount on Bonds Payable. 
D)  Debit to Premium on Bonds Payable. 
E)  Debit to Discount on Bonds PayablE.

Question 15

Over the life of a note payable,the amount of interest expense allocated to each period is calculated by:

Accepted Answer

A)  Multiplying the interest rate at issuance of the note by the beginning-of-period balance of the note. 
B)  Dividing the interest rate at issuance of the note by the beginning-of-period balance of the note. 
C)  Multiplying the interest rate at issuance of the note by the end-of-period balance of the note. 
D)  Multiplying the market interest rate at issuance of the note by the beginning-of-period balance of the note. 
E)  Multiplying either the interest rate or the market interest rate at issuance of the note by the beginning-of-period balance of the notE. 
A)  Multiplying the interest rate at issuance of the note by the beginning-of-period balance of the note. 
B)  Dividing the interest rate at issuance of the note by the beginning-of-period balance of the note. 
C)  Multiplying the interest rate at issuance of the note by the end-of-period balance of the note. 
D)  Multiplying the market interest rate at issuance of the note by the beginning-of-period balance of the note. 
E)  Multiplying either the interest rate or the market interest rate at issuance of the note by the beginning-of-period balance of the notE.

Question 16

Yawn Corporation has bonds outstanding with a par value of $400,000.The unamortized discount on these bonds is $24,500.The corporation called these bonds at 96.Calculate the corporation's gain or loss on the retirement.

Accepted Answer

The answer of Yawn Corporation has bonds outstanding with a...

Question 17

When graphing the carrying value of a premium bond vs the par value of a premium bond,the lines intersect at the maturity date of the bond.

Accepted Answer

A) True 
 B)False

Question 18

Scott Corporation issued $1,000,000,8% bonds,receiving a $30,000 premium.On the interest payment date 5 years later,after the bond interest was paid and after 40% of the premium had been amortized,the corporation purchased the entire issue on the open market at 95 and retired the issue.As a result,the gain on retirement was:

Accepted Answer

A)  $12,000. 
B)  $13,000. 
C)  $18,000. 
D)  $68,000. 
E)  $130,000. 
A)  $12,000. 
B)  $13,000. 
C)  $18,000. 
D)  $68,000. 
E)  $130,000.

Question 19

Debentures are secured debt.

Accepted Answer

A) True 
 B)False

Question 20

Shorty Corporation issued $100,000,5%,10-year bonds,with interest payable semiannually.The market rate on the issue date was 6%.Prepare the entry for issuing the bond.

Accepted Answer

The answer of Shorty Corporation issued $100,000,5%,10-year bonds,with interest payable...

The contract rate is also called the:

Discuss the issues in accounting for notes payable.

A corporation can reserve the right to retire bonds early by issuing _______________ bonds.

Discuss the difference between operating and finance leases.

You graphed the carrying value and par value over the life of a bond.You noticed that the carrying value is above the par value line and that the two lines meet over time.Identify the statement below that is best described by the graph you drew.

Kent Corporation has $100,000 in bonds outstanding.The unamortized premium on these bonds is $2,700.If the corporation redeems these bonds at 99,what is the gain (loss)on retirement?

On December 31,2015,Bumpy Corporation borrowed $80,000 by signing a 12% installment note that is to be repaid in 8 annual payments,the first of which is due on December 31,2016.

Discuss the retirement of bonds.

The Premium on Bonds Payable account is a(n):

Bonds that have interest coupons attached to their certificates,which the bondholders detach when they mature and present to a bank for collection,are called:

A bond issue with a $100,000 par value,an 8% annual contract rate,with interest payable semiannually and a 10-year life means that the issuer must repay $100,000 at the end of 10 years plus make 20 payments of $4,000.

Bonds with a par value of $100,000,which pay 9% annual interest and pay interest on June 30 and December 31,were sold on July 31 at par value.The issuer will receive $100,750 cash for the sale of the bond.

Amortization of a bond discount:

Dawson Inc received proceeds of $206,948 on a bond issue with a par value of $200,000.The difference between par value and issue price is recorded as a:

Over the life of a note payable,the amount of interest expense allocated to each period is calculated by:

Yawn Corporation has bonds outstanding with a par value of $400,000.The unamortized discount on these bonds is $24,500.The corporation called these bonds at 96.Calculate the corporation's gain or loss on the retirement.

When graphing the carrying value of a premium bond vs the par value of a premium bond,the lines intersect at the maturity date of the bond.

Debentures are secured debt.

Shorty Corporation issued $100,000,5%,10-year bonds,with interest payable semiannually.The market rate on the issue date was 6%.Prepare the entry for issuing the bond.

Property,plant and Equipment,and Intangibles

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Income,earnings Per Share,and Retained Earnings

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

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Exam 15: Bonds and Long-Term Notes Payable

The contract rate is also called the:

Discuss the issues in accounting for notes payable.

A corporation can reserve the right to retire bonds early by issuing _______________ bonds.

Discuss the difference between operating and finance leases.

You graphed the carrying value and par value over the life of a bond.You noticed that the carrying value is above the par value line and that the two lines meet over time.Identify the statement below that is best described by the graph you drew.

Kent Corporation has $100,000 in bonds outstanding.The unamortized premium on these bonds is $2,700.If the corporation redeems these bonds at 99,what is the gain (loss)on retirement?

On December 31,2015,Bumpy Corporation borrowed $80,000 by signing a 12% installment note that is to be repaid in 8 annual payments,the first of which is due on December 31,2016.

Discuss the retirement of bonds.

The Premium on Bonds Payable account is a(n):

Bonds that have interest coupons attached to their certificates,which the bondholders detach when they mature and present to a bank for collection,are called:

A bond issue with a $100,000 par value,an 8% annual contract rate,with interest payable semiannually and a 10-year life means that the issuer must repay $100,000 at the end of 10 years plus make 20 payments of $4,000.

Bonds with a par value of $100,000,which pay 9% annual interest and pay interest on June 30 and December 31,were sold on July 31 at par value.The issuer will receive $100,750 cash for the sale of the bond.

Amortization of a bond discount:

Dawson Inc received proceeds of $206,948 on a bond issue with a par value of $200,000.The difference between par value and issue price is recorded as a:

Over the life of a note payable,the amount of interest expense allocated to each period is calculated by:

Yawn Corporation has bonds outstanding with a par value of $400,000.The unamortized discount on these bonds is $24,500.The corporation called these bonds at 96.Calculate the corporation's gain or loss on the retirement.

When graphing the carrying value of a premium bond vs the par value of a premium bond,the lines intersect at the maturity date of the bond.

Debentures are secured debt.

Shorty Corporation issued $100,000,5%,10-year bonds,with interest payable semiannually.The market rate on the issue date was 6%.Prepare the entry for issuing the bond.

Property,plant and Equipment,and Intangibles

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Income,earnings Per Share,and Retained Earnings

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Filters