A112Ch16 - Chapter 16 ACCT 111 1. Bonds that mature in...

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Chapter 16 ACCT 111 1. Bonds that mature in installments are called [A] serial bonds. [B] zero coupon bonds. [C] term bonds. [D] debenture bonds. 2.. An unsecured bond is the same as a [A] debenture bond. [B] zero coupon bond. [C] term bond. [D] bond indenture. 3. A corporation issues bond certificates to [A] owners. [B] principals. [C] debtors. [D] creditors. 4. A bond with a face value of $1,000 has a current price quote of 102 1/4. This bond is selling for [A] $1,022.50. [B] $1,225.00. [C] $1,020.25. [D] $1,002.25. 5. A bond indenture is [A] the agreement between the issuing corporation and the bondholders. [B] a bond that has past due interest payments. [C] a bond that is secured by specific assets of the issuing corporation. [D] a bond that is unsecured. 6. Debenture bonds are [A] bonds that have a single maturity date. [B] issued only by the federal government. [C] bonds secured by specific assets of the issuing corporation. [D] issued on the general credit of the corporation and do not pledge certain assets as collateral. 7. A bond with a face value of $10,000 has a current price quote of 101.62. The price in dollars and cents is [A] $10,162.00. [B] $10,001.62. [C] $10,100.62. [D] $10,016.20.
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8. Term bonds are bonds that [A] are also called serial bonds. [B] may be called in and redeemed by the issuing corporation prior to their scheduled maturity date. [C] mature in one lump sum at a single maturity date. [D] are secured by specific assets of the issuing corporation. 9. Ten $1,000 bonds issued at 97 3/4 on the interest date result in a debit to the Cash account for [A] $970.75. [B] $977.50. [C] $9,707.50. [D] $9,775.00. 10. Any unamortized bond discount should be reported on the balance sheet of the issuing corporation as a(n) [A] addition to the face amount of the bonds in the liability section. [B] direct deduction from retained earnings in the stockholders’ equity section. [C] direct deduction from the face amount of the bonds in the liability section. [D] asset. 11. If the market interest rate is higher than the face interest rate at the date of issuance, bonds will [A] sell at a premium. [B] sell at a discount. [C] not sell until the face interest rate is adjusted. [D] sell at face value. 12. If bonds are issued at a premium, the face interest rate is [A] lower than the market rate of interest. [B] too low to attract investors. [C] higher than the market rate of interest. [D] adjusted to a higher effective rate of interest. 13. Bond issue costs
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This note was uploaded on 04/09/2008 for the course ACCT 112 taught by Professor King during the Spring '08 term at Howard County Community College.

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A112Ch16 - Chapter 16 ACCT 111 1. Bonds that mature in...

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