LLS6e Ch 10 MC Quizzes

LLS6e Ch 10 MC Quizzes - Libby/Libby/Short6e...

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Libby/Libby/Short 6e Chapter 10 – Multiple-Choice Quizzes 1 Which of the following may be a disadvantage to issuing bonds to raise long-term capital? A) interest payments to bondholders are fixed charges B) ownership and control of the company are unaffected C) positive financial leverage may be achieved D) interest expense is tax deductible Answer A 2 A bond issued and supported by the general credit standing of the corporation, rather than supported with  pledged assets, is called A) a serial bond. B) a debenture. C) an indenture. D) callable bond. Answer B 3 Bonds with a par value of $500,000 are sold at discount for $481,000. Other than the Cash account, what other  account is debited . A) Premium on Bonds Payable B) Discount on Bonds Payable C) Bonds Payable D) Interest Expense Answer B 4 Accounting for a zero coupon bond is similar to A) accounting for a bond sold at a discount. B)
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LLS6e Ch 10 MC Quizzes - Libby/Libby/Short6e...

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