A) Require the issuer to set aside assets to retire 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 retire 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 14: Long-Term Liabilities

A company calls $150,000 par value of bonds with a carrying amount of $147,950. The company calls the bonds at $151,000. Prepare the journal entry to record the retirement of the bonds.

(Essay)

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Question 101

A corporation borrowed $125,000 cash by signing a 5-year, 9% installment note requiring equal annual payments each December 31 of $32,136. What journal entry would the issuer record for the first payment?

(Multiple Choice)

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Question 102

A company issued 10-year, 9% bonds, with a par value of $500,000 when the market rate was 9.5%. The issuer received $484,087 in cash proceeds. Prepare the issuer's journal entry to record the bond issuance.

(Essay)

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Question 103

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

(True/False)

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Question 104

Sinking fund bonds:

(Multiple Choice)

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Question 105

Hornet Corporation has a loan agreement that provides it with cash today, and the company must pay $25,000 one year from today, $15,000 two years from today, and $5,000 three years from today. Hornet agrees to pay 10% interest. The following are factors from a present value table: What is the amount of cash that Hornet receives today?

(Essay)

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Question 106

Callable bonds reduce the bondholder's risk by requiring the issuer to create a sinking fund of assets set aside at specified amounts and dates to repay the bonds at maturity.

(True/False)

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Question 107

Identify the advantages and disadvantages of bond financing.

(Essay)

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Question 108

Describe the journal entries required to record the issuance of bonds and the payment of bond interest.

(Essay)

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Question 109

The contract between the bond issuer and the bondholders, which identifies the rights and obligations of the parties, is called a(n):

(Multiple Choice)

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Question 110

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

(Multiple Choice)

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Question 111

The effective interest method yields increasing amounts of bond interest expense and decreasing amounts of premium amortization over the bond's life for bonds issued at a premium.

(True/False)

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Question 112

What is a bond? Identify and discuss the different types of bonds.

(Essay)

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Question 113

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 $101,137 cash for the bonds. Using the effective interest method, the amount of recorded interest expense for the first semiannual interest period is:

(Multiple Choice)

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Question 114

Bonds owned by investors whose names and addresses are recorded by the issuing company, and for which interest payments are made with checks or cash transfers to the bondholders, are called:

(Multiple Choice)

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Question 115

On January 1, a company issued a $500,000, 10%, 8-year bond payable, and received proceeds of $487,000. Interest is payable each June 30 and December 31. The total interest expense on the bond over its eight-year life is $400,000.

(True/False)

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Question 116

A bond is a written promise to pay an amount identified as the par value of the bond along with interest.

(True/False)

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Question 117

The carrying amount (book value) of a bond payable is the par value of the bonds plus the discount.

(True/False)

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Question 118

On January 1, a company issues bonds dated January 1 with a par value of $400,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $383,793. The journal entry to record the first interest payment using the effective interest method of amortization is:

(Multiple Choice)

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Question 119

Match each of the following terms with the appropriate definitions.

(Essay)

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Question 120

Showing 101 - 120 of 158

Exam 14: Long-Term Liabilities

A company calls $150,000 par value of bonds with a carrying amount of $147,950. The company calls the bonds at $151,000. Prepare the journal entry to record the retirement of the bonds.

A corporation borrowed $125,000 cash by signing a 5-year, 9% installment note requiring equal annual payments each December 31 of $32,136. What journal entry would the issuer record for the first payment?

A company issued 10-year, 9% bonds, with a par value of $500,000 when the market rate was 9.5%. The issuer received $484,087 in cash proceeds. Prepare the issuer's journal entry to record the bond issuance.

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

Sinking fund bonds:

Callable bonds reduce the bondholder's risk by requiring the issuer to create a sinking fund of assets set aside at specified amounts and dates to repay the bonds at maturity.

Identify the advantages and disadvantages of bond financing.

Describe the journal entries required to record the issuance of bonds and the payment of bond interest.

The contract between the bond issuer and the bondholders, which identifies the rights and obligations of the parties, is called a(n):

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

The effective interest method yields increasing amounts of bond interest expense and decreasing amounts of premium amortization over the bond's life for bonds issued at a premium.

What is a bond? Identify and discuss the different types of bonds.

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 $101,137 cash for the bonds. Using the effective interest method, the amount of recorded interest expense for the first semiannual interest period is:

Bonds owned by investors whose names and addresses are recorded by the issuing company, and for which interest payments are made with checks or cash transfers to the bondholders, are called:

On January 1, a company issued a $500,000, 10%, 8-year bond payable, and received proceeds of $487,000. Interest is payable each June 30 and December 31. The total interest expense on the bond over its eight-year life is $400,000.

A bond is a written promise to pay an amount identified as the par value of the bond along with interest.

The carrying amount (book value) of a bond payable is the par value of the bonds plus the discount.

Match each of the following terms with the appropriate definitions.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Long-Term Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Investments and International Operations

Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

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