Any costs of issuing the bonds must be amortized up to the purchase date.
The premium must be amortized up to the purchase date.
Interest must be accrued from the last interest date to the purchase date.
All of these.
Bond indenture
Bond debenture.
Registered bond.
Bond coupon.
Expensed when incurred.
Reported as a reduction of the bond liability.
Debited to a deferred charge account and amortized over the life of the bonds.
Any of these.
Bearer bonds.
Term bonds.
Debenture bonds.
Secured bonds.
Coupon rate.
Nominal rate.
Stated rate.
Coupon rate, nominal rate, or stated rate.
No interest rate is stated.
The stated interest rate is unreasonable.
The stated face amount of the note is materially different from the current cash sales price for similar items or from current market value of the note.
Any of these.
1
2
3
All of these are examples of "off-balance-sheet financing."
Dividends payable in stock
Advances from customers on contracts.
Accrued estimated warranty costs
The portion of long-term debt due within one year.
Collateral trust bonds.
Debenture bonds.
Revenue bonds.
Income bonds.
A company gets another company to cover its payments due on long-term debt.
a governmental unit issues debt instruments to corporations
A company provides for the future repayment of a long-term debt by placing purchased securities in an irrevocable trust.
A company legally extinguishes debt before its due date.
The fair value of the property, goods, or services.
The market value of the note.
Using an imputed interest rate to discount all future payments on the note.
Any of these.
Junk bonds
Debenture bonds.
Indebenture bonds.
Callable bonds.
The present value of the debt instrument must be approximated using an imputed interest rate.
It should not be recorded on the books of either party until the fair market value of the property becomes evident.
the board of directors of the entity receiving the property should estimate a value for the property that will serve as a basis for the transaction.
The directors of both entities involved in the transaction should negotiate a value to be assigned to the property.
An adjustment to the cost basis of the asset obtained by the debt issue
an amount that should be considered a cash adjustment to the cost of any other debt issued over the remaining life of the old debt instrument.
An amount received or paid to obtain a new debt instrument and, as such, should be amortized over the life of the new debt.
. a difference between the reacquisition price and the net carrying amount of the debt which should be recognized in the period of redemption.
Assets pledged as security.
Call provisions and conversion privileges.
Restrictions imposed by the creditor.
Names of specific creditors.
The effective yield or market rate of interest exceeded the stated (nominal) rate.
The nominal rate of interest exceeded the market rate.
The market and nominal rates coincided.
No necessary relationship exists between the two rates.
Net income by interest expense.
Income before taxes by interest expense.
Income before income taxes and interest expense by interest expense.
Net income and interest expense by interest expense.
Greater than if the straight-line method were used.
Greater than the amount of the interest payments.
The same as if the straight-line method were used.
Less than if the straight-line method were used.
10 periods and 10% from the present value of 1 table.
20 periods and 5% from the present value of 1 table.
10 periods and 8% from the present value of 1 table.
20 periods and 4% from the present value of 1 table.
Exceed what it would have been had the effective-interest method of amortization been used.
Be less than what it would have been had the effective-interest method of amortization been used.
Be the same as what it would have been had the effective-interest method of amortization been used.
Be less than the stated (nominal) rate of interest.
Equally over the life of the note.
Only in the year the note is issued.
Using the effective-interest method.
Only in the year the note matures.
Debit to Interest Payable.
Credit to Interest Receivable.
Credit to Interest Expense.
Credit to Unearned Interest.
The present value of future payments for sinking fund requirements and long-term debt maturities during each of the next five years.
The present value of scheduled interest payments on long-term debt during each of the next five years.
The amount of scheduled interest payments on long-term debt during each of the next five years.
The amount of future payments for sinking fund requirements and long-term debt maturities during each of the next five years.
Loss by the debtor and a gain by the creditor.
Loss by both the debtor and the creditor.
Gain by both the debtor and the creditor.
Gain by the debtor and a loss by the creditor.
No gain or loss on the settlement
A gain on the settlement.
A loss on the settlement.
None of these.
The balance of mortgage payable at a given balance sheet date will be reported as a long-term liability.
The balance of mortgage payable will remain a constant amount over the 10-year period.
The amount of interest expense will decrease each period the loan is outstanding, while the portion of the annual payment applied to the loan principal will increase each period.
The amount of interest expense will remain constant over the 10-year period.
Current liabilities by total assets.
Long-term liabilities by total assets.
Total liabilities by total assets
Total assets by total liabilities.
An asset
A deduction from bonds payable issued to arrive at net bonds payable and outstanding.
A reduction of stockholders' equity.
Both an asset and a liability.
As a current liability.
In a special section between liabilities and stockholders’ equity.
As noncurrent.
As noncurrent and accompanied with a note explaining the method to be used in its liquidation.
Carrying amount of the pre-restructure debt is less than the total future cash flows.
Carrying amount of the pre-restructure debt is greater than the total future cash flows.
Present value of the pre-restructure debt is less than the present value of the future cash flows.
Present value of the pre-restructure debt is greater than the present value of the future cash flows.
The stated (nominal) rate of interest multiplied by the face value of the bonds.
The market rate of interest multiplied by the face value of the bonds.
The stated rate multiplied by the beginning-of-period carrying amount of the bonds.
The market rate multiplied by the beginning-of-period carrying amount of the bonds.
Increase if the bonds were issued at a discount.
Decrease if the bonds were issued at a premium.
Increase if the bonds were issued at a premium.
Increase if the bonds were issued at either a discount or a premium.
Be expensed when incurred.
Be reported as a deduction from the face amount of bonds payable.
Be accumulated in a deferred charge account and amortized over the life of the bonds.
Not be reported as an expense until the period the bonds mature or are retired.
Multiply $10,000 by the table value for 10 periods and 10% from the present value of an annuity table.
Multiply $10,000 by the table value for 20 periods and 5% from the present value of an annuity table.
Multiply $10,000 by the table value for 20 periods and 4% from the present value of an annuity table.
None of these.
Decreased by accrued interest from June 1 to November 1.
decreased by accrued interest from May 1 to June 1.
Increased by accrued interest from June 1 to November 1.
Increased by accrued interest from May 1 to June 1.
Is attempting to conceal the debt from shareholders by having no information about the debt included in the balance sheet.
Wishes to confine all information related to the debt to the income statement and the statement of cash flow.
Can enhance the quality of its financial position and perhaps permit credit to be obtained more readily and at less cost.
Is in violation of generally accepted accounting principles.
A loss should be recognized by the debtor.
A gain should be recognized by the debtor.
A new effective-interest rate must be computed.
No interest expense or revenue should be recognized in the future.
Compute a new effective-interest rate.
Not recognize a loss.
Calculate its loss using the historical effective rate of the loan.
Calculate its loss using the current effective rate of the loan.
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