Question :
71.When the issuing corporation has the right to require the : 1169141
71.When the issuing corporation has the right to require the owners to surrender the bonds for payment before the maturity date of the bonds, the bonds are referred to as
A. serial bonds.
B. convertible bonds.
C. registered bonds.
D. callable bonds.
72.If a bond is a registered bond, it can NOT be a ___________ bond.
A. discount
B. callable
C. convertible
D. coupon
73.Using borrowed funds to earn a profit higher than the interest charged for borrowing is called
A. leveraging.
B. amortizing.
C. investing.
D. secured borrowing.
74.Corporations with many bondholders will open a separate checking account because
A. it is required by law.
B. the account earns interest.
C. it is easier to do the bookkeeping on the bond interest.
D. it keeps the bond interest records separate for tax purposes.
75.In the interest formula I = Prt, the P stands for
A. Payment.
B. Principal.
C. Premium.
D. Prime number.
76.Bonds issued at a premium are
A. traded for stock.
B. sold at face value.
C. sold at less than face value.
D. sold for more than face value.
77.If market interest rates are higher than the rate offered on the bonds being sold, they will be sold at
A. a premium.
B. a discount.
C. face value.
D. a loss.
78.Retained earnings are often appropriated while the bonds are outstanding. Which of the following is a reason for the appropriation?
A. Corporation management wants to protect the bondholders.
B. The bond underwriters always require it.
C. Tax law requires it.
D. The buyers require it.
79.Retained Earnings Appropriated for Bond Retirement appears as a separate line item
A. on the Income Statement.
B. on the Balance Sheet.
C. on the Bond Interest Reconciliation Schedule.
D. on the Statement of Cash Flows.
80.The difference between the face value and the selling price of a 10-year discounted bond issued two years after authorization, is amortized for
A. 10 years.
B. 8 years.
C. 2 years.
D. The difference is not amortized, only interest is amortized.
81.The amortization of the bond discount __________ the carrying value of the bond, while the amortization of the bond premium __________ the carrying value of the bond.
A. decreases; increases
B. increases; decreases
C. increases; increases
D. decreases; decreases
82.On April 1, Fifedom, Inc. repurchased its $100,000 10-year, 9% bonds on the open market at 107. The bond’s carrying value after accruing interest was $98,000 at the time of repurchase. The gain/loss on early retirement of the bonds is:
A. $2,000 gain.
B. $9,000 gain.
C. $9,000 loss.
D. $7,000 loss.
