Question : 65.              The cash payments made during the fifth year of : 1370075

65.              The cash payments made during the fifth year of a 10-year interest bearing note would be reported on the statement of cash flows in the:

A)both b and c are correct

B)operating activities section

C)investing activities section

D)financing activities section

66.              The total cash payments made in the year of maturity relative to an interest bearing note would be reported on the statement of cash flows in the:

A)operating activities section

B)investing activities section

C)financing activities section

D)both a and c are correct

67.              When the market rate of interest on the date bonds are issued is higher than the face rate of interest on the bonds:

A)the proceeds from the issuance of the bonds will be greater than the face value of the bonds

B)the bonds are issued at a premium

C)the bonds are issued at a discount

D)both a and c are correct

68.              When the market rate of interest on the date bonds are issued is lower than the face rate of interest on the bonds:

A)the proceeds from the issuance of the bonds will be less than the face value of the bonds

B)the bonds are issued at a premium

C)the bonds are issued at a discount

D)both a and c are correct

69.              The journal entry to record the interest payment of a bond payable issued at a discount would include a:

A)debit to Discount on Bonds Payable

B)debit to Interest Expense

C)credit to Bonds Payable

D)debit to Cash

70.              Bonds are issued at a discount when the:

A)proceeds from the issuance of the bonds are smaller than the face value of the bonds

B)market rate of interest is higher than the face rate of interest on the bonds

C)face rate of interest on the bonds is equal to the market rate of interest

D)both a and b are correct

71.              The amortization of a discount on bonds payable:

A)decreases the carrying value of the bonds

B)increases the amount of interest expense recorded for the bonds

C)decreases the amount of interest expense recorded for the bonds

D)has no effect on the amount of interest expense recorded for the bonds

72.              On the maturity date of bonds issued at a discount:

A)the Discount on Bonds Payable account has been fully amortized

B)the amount of the liability is equal to the face value of the bonds

C)the carrying value of the bonds is less than face value

D)both a and b are correct

73.              The amortization of a discount on bonds payable:

A)has no effect on the cash payments for interest reported in the operating activities section of the statement of cash flows

B)decreases the cash payments for interest reported in the operating activities section of the statement of cash flows

C)increases the cash payments for interest reported in the operating activities section of the statement of cash flows

D)is reported in the financing activities section of the statement of cash flows

74.              When the face rate of interest is higher than the market rate of interest on the date bonds are issued:

A)the proceeds from the issuance of the bonds are less than the face value of the bonds

B)the bonds are issued at a premium

C)the bonds are issued at a discount

D)both a and c are correct