Question 1

The balance in a bond discount account should be reported on the balance sheet as a deduction from the related bonds payable.

Accepted Answer

A) True 
 B)False

Question 2

Using the following table, what is the present value of $5,000 to be received 5 years, if the market rate is 10% compounded annually?

Accepted Answer

X = $5,000...

Question 3

Only callable bonds can be purchased by the issuing corporation before maturity.

Accepted Answer

A) True 
 B)False

Question 4

When the market rate of interest was 12%, Halprin Corporation issued $1,000,000, 11%, 10-year bonds that pay interest annually. The selling price of this bond issue was

Accepted Answer

A)   $ 321,970
B)   $1,000,000
C)   $ 943,494
D)   $621,524E) C) and D)
F) A) and D)

Question 5

On the first day of the fiscal year, Hawthorne Company obtained a $ 88,000, seven-year, 5% installment note from Sea Side Bank. The note requires annual payments of $15,208, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $4,400 and principal repayment of $10,808. The journal entry Hawthorne would record to make the first annual payment due on the note would include:

Accepted Answer

A)   a debit to Cash of $15,208
B)   a credit to Notes Payable for $10,808
C)   a debit to Interest Expense for $4,400
D)   a debit to Notes Payable for $15,208E) B) and C)
F) None of the above

Question 6

On January 1, 2014, the Baker Corporation issued 10% bonds with a face value of $50,000. The bonds are sold for $46,000. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, 2023. Baker records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31, 2014, is

Accepted Answer

A)   $5,000
B)   $5,200
C)   $5,800
D)   $5,400E) A) and B)
F) B) and D)

Exam 12: Long-Term Liabilities: Bonds and Notes

The balance in a bond discount account should be reported on the balance sheet as a deduction from the related bonds payable.

Correct Answer
verified

Correct Answer
verified

Using the following table, what is the present value of $5,000 to be received 5 years, if the market rate is 10% compounded annually?

Correct Answer
verified
X = $5,000...
View Answer

Only callable bonds can be purchased by the issuing corporation before maturity.

Correct Answer
verified

When the market rate of interest was 12%, Halprin Corporation issued $1,000,000, 11%, 10-year bonds that pay interest annually. The selling price of this bond issue was

Correct Answer
verified

Correct Answer
verified

Exam 12: Long-Term Liabilities: Bonds and Notes

The balance in a bond discount account should be reported on the balance sheet as a deduction from the related bonds payable.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Using the following table, what is the present value of $5,000 to be received 5 years, if the market rate is 10% compounded annually?

Correct AnswerverifiedX = $5,000...View AnswerShow Answer

Only callable bonds can be purchased by the issuing corporation before maturity.

Correct AnswerverifiedShow Answer

When the market rate of interest was 12%, Halprin Corporation issued $1,000,000, 11%, 10-year bonds that pay interest annually. The selling price of this bond issue was

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
X = $5,000...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified