Long-term Liabilities, Accounting

Question: The term used for bonds that are unsecured is:
A
callable bonds.

B
indenture bonds.

C
debenture bonds.

D
bearer bonds.

Note: Not available
1. Report
Question: karson Inc. issues 10-years bonds with maturity value of $200,000. If the bonds are issued at a premium, this indicates that:
A
the contractual interest rate exceeds the market interest rate.

B
the market interest rate exceeds the contractual interest rate.

C
the contractual interest rate and the market interest rate are the same.

D
no relationship exists between the two rates.

Note: Not available
1. Report
Question: On January 1, Hurley Corporation issues $500,000, 5-years,12% bonds at 96 with interest payable on July 1 and January 1. The entry on July 1 to record payment of bond interest and the amortization of bond discount using the straight-line method will include a:
A
debit to Interest Expense $30,000.

B
debit it Interest Expense $60,000.

C
credit to Discount on Bonds Payable $4,000.

D
credit ti Discount on Bonds Payable $2000.

Note: Not available
1. Report
Question: For the bonds issued in question 3, above, what is the carrying value of the bonds at the third interest period?
A
$486,000

B
$488,000

C
$472,000

D
$464,000

Note: Not available
1. Report
Question: When the interest payments dates of a bond are May 1 and November 1, and a bond issue is sold on June 1, the amount of cash received by the issue will be:
A
decreased by accrued interest from June 1 to November 1.

B
decreased by accrued interest from May 1 to June 1.

C
increased by accrued interest from May 1 to June 1.

D
increased by accrued interest from June 1 to November 1.

Note: Not available
1. Report
Question: Gester Corporation retires its $100,000 face value bonds at 105 on January 1, following the payment of semiannual interest. The carrying value of the bonds at the redemption date is $103,745. The entry to record the redemption will include a:
A
credit of $3,745 to Loss on Bond Redemption.

B
debit of $3,745 to Premium on Bonds Payable.

C
credit of $1,255 to Gain on Bond Redemption.

D
debit of $5,000 to Premium on Bonds Payable.

Note: Not available
1. Report
Question: Sanger Company has a bond sinking fund in the amount of $400,000. Where should this amount be reported on the balance sheet?
A
Investment section.

B
Current assets section.

C
Current liabilities section.

D
Long-term liabilities section.

Note: Not available
1. Report
Question: Andrews Inc. issues a $497,000, 10% 3-years mortgage note on January 1. The note will be paid in three annual installments of $200,000, each payable at the end of the year. What is the amount of interest expense that should be recognized by Andrews Inc. in the second year?
A
$16,567

B
$49,740

C
$34,670

D
$347,600

Note: Not available
1. Report
Question: Lease A does not contain a bargain purchase option, but the lease term is equal to 90 percent of the estimated economic life of the leased property. Lease B does not transfer ownership of the property to the lessee by the end of the lease term, but the lease term is equal to 75 percent of the estimated economic life of the leased property. How should the lessee classify these leases. Lease A Lease B
A
Operation lease Capital lease

B
Operation lease Operation lease

C
Capital lease Operation lease

D
Capital lease Capital lease

Note: Not available
1. Report
Question: On January 1, Besalius Inc. issued $1,000,000, 9% bonds for $939,000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. Besalius uses the effective-interest method of amortizing bond discount. At the end of the first year, Besalius should report unamortized bond discount of:
A
$54,000

B
$57,100

C
$51,610

D
$51,000

Note: Not available
1. Report

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Question: The term used for bonds that are unsecured is:

Question: karson Inc. issues 10-years bonds with maturity value of $200,000. If the bonds are issued at a premium, this indicates that:

Question: On January 1, Hurley Corporation issues $500,000, 5-years,12% bonds at 96 with interest payable on July 1 and January 1. The entry on July 1 to record payment of bond interest and the amortization of bond discount using the straight-line method will include a:

Question: For the bonds issued in question 3, above, what is the carrying value of the bonds at the third interest period?

Question: When the interest payments dates of a bond are May 1 and November 1, and a bond issue is sold on June 1, the amount of cash received by the issue will be:

Question: Gester Corporation retires its $100,000 face value bonds at 105 on January 1, following the payment of semiannual interest. The carrying value of the bonds at the redemption date is $103,745. The entry to record the redemption will include a:

Question: Sanger Company has a bond sinking fund in the amount of $400,000. Where should this amount be reported on the balance sheet?

Question: Andrews Inc. issues a $497,000, 10% 3-years mortgage note on January 1. The note will be paid in three annual installments of $200,000, each payable at the end of the year. What is the amount of interest expense that should be recognized by Andrews Inc. in the second year?