Question : 118.If an issuer sells bonds at a date other than : 1236446

118.If an issuer sells bonds at a date other than an interest payment date:   

A.This means the bonds sell at a premium.

B.This means the bonds sell at a discount.

C.The issuing company will report a loss on the sale of the bonds.

D.The issuing company will report a gain on the sale of the bonds.

E.The buyers normally pay the issuer the purchase price plus any interest accrued since the prior interest payment date.

119.A company issues 9% bonds with a par value of $100,000 at par on April 1, which is 4 months after the most recent interest date. The cash received for accrued interest on April 1 by the bond issuer is:   

A.$750.

B.$5,250.

C.$1,500.

D.$3,000.

E.$6,000.

120.A company issues 9% bonds with a par value of $100,000 at par on April 1. The bonds pay interest semi-annually on January 1 and July 1. The cash paid on July 1 to the bond holder(s) is:    

A.$1,500.

B.$3,000.

C.$4,500.

D.$6,000.

E.$7,500.

121.A company issued 5-year, 7% bonds with a par value of $100,000. The market rate when the bonds were issued was 6.5%. The company received $102,105 cash for the bonds. Using the straight-line method, the amount of recorded interest expense for the first semiannual interest period is:   

A.$3,289.50.

B.$3,500.00.

C.$3,613,70.

D.$6,633.70.

E.$7,000.00.

122.A company issued 5-year, 7% bonds with a par value of $100,000. The market rate when the bonds were issued was 6.5%. The company received $102,105 cash for the bonds. Using the effective interest method, the amount of recorded interest expense for the first semiannual interest period is:    

A.$3,500.00.

B.$7,000.00.

C.$3,318.41.

D.$6,573.90.

E.$1,750.00.

123.A company may retire bonds by all but which of the following means?    

A.Exercising a call option.

B.The holders converting them to stock.

C.Purchasing the bonds on the open market.

D.Paying them off at maturity.

E.Paying all future interest and cancelling the debt.

124.Bonds that give the issuer an option of retiring them before they mature are:   

A.Debentures.

B.Serial bonds.

C.Sinking fund bonds.

D.Registered bonds.

E.Callable bonds.

125.A company has bonds outstanding with a par value of $100,000. The unamortized discount on these bonds is $4,500. The company retired these bonds by buying them on the open market at 97. What is the gain or loss on this retirement?    

A.$0 gain or loss.

B.$1,500 gain.

C.$1,500 loss.

D.$3,000 gain.

E.$3,000 loss.

126.Clabber Company has bonds outstanding with a par value of $100,000 and a carrying value of $97,300. If the company calls these bonds at a price of $95,000, the gain or loss on retirement is:    

A.$5,000 loss.

B.$2,700 gain.

C.$2,700 loss.

D.$2,300 loss.

E.$2,300 gain.

127.A company has bonds outstanding with a par value of $100,000. The unamortized premium on these bonds is $2,700. If the company retired these bonds at a call price of 99, the gain or loss on this retirement is:    

A.$1,000 gain.

B.$1,000 loss.

C.$2,700 loss.

D.$2,700 gain.

E.$3,700 gain.