College Acct 1- Chapters 10-11 Review

Front

A bond sells at a discount when the:

Back

Contract rate is below the market rate

Front

The Discount on Bonds Payable account is:

Back

A contra liability

Front

The Premium on Bonds Payable account is a(n):

Back

Adjunct liability account

Front

A bond is issued at par value when: The market rate of interest is the same as the contract rate of interest

Back

The market rate of interest is the same as the contract rate of interest

Front

Morgan Company issues 9%, 20-year bonds with a par value of $750,000 that pay interest semiannually. The current market rate is 8%. The amount paid to the bondholders for each semiannual interest payment is:

Back

$33,750

Front

On January 1, Parson Freight Company issues 7%, 10-year bonds with a par value of $2,000,000. The bonds pay interest semiannually. The market rate of interest is 8% and the bond selling price was $1,864,097. The bond issuance should be recorded as:

Back

Debit Cash $1,864,097; debit Discount on Bonds Payable $135,903; credit Bonds Payable $2,000,000

Front

On January 1, a company issued and sold a $400,000, 7%, 10-year bond payable, and received proceeds of $396,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The journal entry to record the first interest payment is:

Back

Debit Bond Interest Expense $14,200; credit Cash $14,000; credit Discount on Bonds Payable $200

Front

Par value of a stock refers to:

Back

Value assigned per share by the corporate charter

Front

A corporation's distribution of additional shares of its own stock to its stockholders without the receipt of any payment in return is called a:

Back

Stock dividend

Front

A company issued 130 shares of $100 par value common stock for $15,400 cash. The total amount of paid-in capital in excess of par is:

Back

$2,400