
College Accounting - Ch 14
Authored by Elizabeth Rudden
Business
11th Grade - University
Used 12+ times

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15 questions
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1.
MULTIPLE CHOICE QUESTION
45 sec • 1 pt
On March 1, 2015, Vinnie Services issued a 5% long−term notes payable for $15,000. It is payable over a 3−year term in $5,000 annual principal payments on March 1 of each year plus interest, beginning March 1, 2016. How will this information be shown on the balance sheet dated December 31, 2015?
$5,000 shown as current liability; $10,000 shown as long−term liability
$15,000 shown as current liability only
$5,000 shown as current liability; $15,000 shown as long−term liability
the entire $15,000 shown as long−term liability
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
The issue price of a bond—whether it is sold at par, premium, or discount—has an effect on the principal repayment at maturity.
True
False
3.
MULTIPLE CHOICE QUESTION
45 sec • 1 pt
Which of the following statements is true of a bond that is issued at a premium?
The bond will be issued at par.
The bond will be issued at an amount above face value.
At maturity, the bond will repay an amount that is greater than the face value.
The stated interest rate is lower than the prevailing market rate.
4.
MULTIPLE CHOICE QUESTION
45 sec • 1 pt
The interest rate on which cash payments to bondholders are based is the:
amortization rate.
discount rate.
market rate.
stated rate.
5.
MULTIPLE CHOICE QUESTION
45 sec • 1 pt
Which of the following describes a serial bond?
a bond that repays principal in installments
a bond that matures at one specified time
a bond that gives the bondholder a claim for specific assets if the issuer fails to pay
a bond that is not backed by specific assets
6.
MULTIPLE CHOICE QUESTION
45 sec • 1 pt
If bonds with a face value of $200,000 are sold at par, the amount of cash proceeds is:
$192,157.
$200,000.
$202,000.
$196,000.
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Premium on Bonds Payable is considered to be an additional Interest Expense of the company that issues the bond.
True
False
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