chapter 17

chapter 17 - MultipleChoice,Question22 Correct....

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Multiple Choice, Question 22
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Correct.     A correct valuation is available-for-sale at amortized cost. held-to-maturity at amortized cost. held-to-maturity at fair value. none of these. Multiple Choice, Question 24 Correct.     Unrealized holding gains or losses which are recognized in income are from securities classified as held-to-maturity. available-for-sale. trading. none of these.
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Correct   Multiple Choice,  Question 25 When an investor's accounting period ends on a date that does not coincide with an interest receipt date for bonds held as  an investment, the investor must make an adjusting entry to debit Interest Receivable and to credit Interest Revenue for the total amount of interest to be  received at the next interest receipt date. do nothing special and ignore the fact that the accounting period does not coincide with the bond's interest period. make an adjusting entry to debit Interest Receivable and to credit Interest Revenue for the amount of interest accrued since  the last interest receipt date. notify the issuer and request that a special payment be made for the appropriate portion of the interest period. Multiple Choice, Question 27 Correct.     Debt securities acquired by a corporation which are accounted for by recognizing unrealized holding gains or losses and are  included as other comprehensive income and as a separate component of stockholders' equity are available-for-sale debt securities. trading debt securities.
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never-sell debt securities. held-to-maturity debt securities. Correct Multiple Choice,  Question 28 Use of the effective-interest method in amortizing bond premiums and discounts results in a variable rate of return on the book value of the investment. a smaller amount of interest income over the life of the bond issue than would result from use of the straight-line method. a greater amount of interest income over the life of the bond issue than would result from use of the straight-line method. a varying amount being recorded as interest income from period to period. Multiple Choice, Question 34 Correct.     In accounting for investments in debt securities that are classified as trading securities, a discount is reported separately.
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a premium is reported separately. unrealized holding gain or loss is reported on income statement. none of these. Multiple Choice, Question 36 Correct.     Jordan Co. purchased ten-year, 10% bonds that pay interest semiannually. The bonds are sold to yield 8%. One step in  calculating the issue price of the bonds is to multiply the principal by the table value for 20 periods and 4% from the present value of 1 table. 10 periods and 10% from the present value of 1 table.
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This note was uploaded on 07/27/2011 for the course ACCT 305 taught by Professor N/a during the Fall '10 term at Strayer.

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chapter 17 - MultipleChoice,Question22 Correct....

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