Practice Test Ch14

Practice Test Ch14 - Practice Test Chapter 14 Acctg 202 1 A...

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Practice Test Chapter 14 –Acctg 202 1. A company issues 9%, 20-year bonds with a par value of $750,000. The current market rate is 9%. The total amount of interest owed to the bondholders for each semiannual interest payment is. A) $ 67,500. B) $1,550,000. C) $ 33,750. D) $ 0. E) $ 750,000. 2. A company issued 7%, 5-year bonds with a par value of $100,000. The market rate when the bonds were issued was 7.5%. The company received $97,947 cash for the bonds. Using the effective interest method, the amount of interest expense for the first semiannual interest period is: A) $7,000.00. B) $3,500.00. C) $3,673.01. D) $7,346.03. E) $3,705.30. 3. Adidas issued 10-year, 8% bonds with a par value of $200,000. The market rate on the issue date was 7.5%. Adidas received $206,948 in cash proceeds. Which of the following statements is true? A) Adidas must pay $206,948 at maturity plus 20 interest payments of $8,000 each. B) Adidas must pay $206,948 at maturity and no interest payments.
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This note was uploaded on 02/14/2010 for the course ACCT 202 taught by Professor Horton,d during the Spring '09 term at Shoreline.

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Practice Test Ch14 - Practice Test Chapter 14 Acctg 202 1 A...

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