KIC000093 - Ql Quiz 5 - 15 points Fall 2008 - Chapter 10...

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Unformatted text preview: Ql Quiz 5 - 15 points Fall 2008 - Chapter 10 Name Accounting 284 Dr. Anne Clem 0Y ju~:bn Hol"--'-IY\+- Row # Lv SeQ\-; II;) Class Time: _ 10 am Choose the best answer and indicate your answer in the space provided. choice (2 pts. each and workout answers 1 pt. each) ~l. Multiple Which of the following terms is used to describe the rate on which cash payments on bonds are based? A) market rate C) effective rate stated rate B) yield rate ® L2. On July 1,2005, Wilson Company issued $1,000,000, five-year, 9% bonds N7. The reason Wilson issued the bonds at a discount was ~ the stated rate of interest was lower than the rate being paid on investments with comparable risk. B) the stated rate of interest was the same as the rate being paid on investments with comparable risk. C) the stated rate of interest was higher than the rate being paid on investments with comparable risk. D) the bonds were callable. b ~ 3. The amortization of bond premium by the issuer will increase interest expense. ,decrease interest expense. C)' have no effect on interest expense. D) determine the cash paid for interest. em L 4. Which of the following are generally recorded as liabilities on the balance sheet? A) Remote likelihood liabilities .A) Reasonably possible likelihood liabilities Probable likelihood liabilities D) all of these c...g ~5. On January 1, 2005, Winston Corporation sold a four-year, $10,000, 7% bond. The interest is payable annually each December 31. The issue price was $9,668 based on an 8% effective interest rate. Assuming effective-interest amortization is used, the interest expense on the 2005 income statement would be (to the nearest dollar) A) $ 1,547. /00 B) $ 883. -73.'-1'-1 (91$ 773. D) $ 700. ...
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This note was uploaded on 09/01/2011 for the course ACCT 284 taught by Professor Clem during the Fall '08 term at Iowa State.

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