Chapter 14 practice quizes

Chapter 14 practice quizes - Review Assessment: Chapter 14:...

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Review Assessment: Chapter 14: True/False Quiz Question 1 0 out of 1 points The interest rate specified on the bond indenture is called the contract rate or effective rate. Correct Answer: False Feedback: Incorrect. The interest rate specified on the bond indenture is called the contract rate. It is not called the effective rate, which is sometimes called the market rate. Question 2 0 out of 1 points If the market rate is lower than the contract rate, the bonds will sell at a discount. Correct Answer: False Feedback: Incorrect. If the market rate is lower than the contract rate, the bonds will sell at a premium, not a discount. Question 3 0 out of 1 points The amortization of a premium on a bonds payable increases interest expense.
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Correct Answer: False Feedback: Incorrect. The amortization of a premium on bonds payable decreases interest expense rather than increasing interest expense. Question 4
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Chapter 14 practice quizes - Review Assessment: Chapter 14:...

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