Question : 127.A bond with a face value of $10,000 has a : 1244132

127.A bond with a face value of $10,000 has a current price quote of 102.62. The price in dollars and cents is

 

a.

$10,002.62.

b.

$10,262.00.

c.

$10,200.62.

d.

$10,026.20.

 

 

 

128.Serial bonds are bonds that

 

a.

are also called term bonds.

b.

all have the same maturity date.

c.

mature on several different dates.

d.

must be secured.

 

 

 

129.Term bonds are bonds that

 

a.

mature in one lump sum at a single maturity date.

b.

are secured by specific assets of the issuing corporation.

c.

are also called serial bonds.

d.

may be called in and redeemed by the issuing corporation prior to their scheduled maturity date.

 

 

 

130.Ten $1,000 bonds issued at 99.75 on the interest date result in a debit to the Cash account for

 

a.

$9,975.00.

b.

$990.75.

c.

$997.50.

d.

$9,907.50.

 

 

 

131.Bonds Payable should be classified as a long-term liability on a balance sheet unless the issue is

 

a.

maturing within one year of the balance sheet date and is to be retired by the use of current assets.

b.

maturing within one year of the balance sheet date and is to be paid by segregated assets that are classified as long-term assets.

c.

maturing within one year of the balance sheet date and is to be replaced by another bond issue.

d.

not maturing within one year of the balance sheet date.

 

 

 

132.Bond issue costs

 

a.

must be amortized over the life of the bonds.

b.

must be expensed when incurred.

c.

are recorded in an asset account and not amortized.

d.

appear on the balance sheet as a liability.

 

 

 

133.Any unamortized bond discount should be reported on the balance sheet of the issuing corporation as a(n)

 

a.

asset.

b.

direct deduction from the face amount of the bonds in the liability section.

c.

direct deduction from retained earnings in the stockholders’ equity section.

d.

addition to the face amount of the bonds in the liability section.

 

 

 

134.The entry to record the issuance of bonds at a discount on an interest payment date should include a

 

a.

debit to Cash for the face amount of the bonds minus the amount of the discount.

b.

debit to Cash for the face amount of the bonds plus the amount of the discount.

c.

debit to Cash for the face amount of the bonds.

d.

credit to Cash for the face amount of the bonds.

 

 

 

135.Bond issue costs have the effect of

 

a.

decreasing the effective interest rate.

b.

increasing a bond premium.

c.

decreasing a bond premium.

d.

decreasing a bond discount.

 

 

 

136.The entry to record the issuance of bonds at a premium on an interest payment date should include a

 

a.

credit to Cash for the face amount plus the amount of the premium.

b.

debit to Bonds Payable for the face amount.

c.

debit to Cash for the face amount.

d.

credit to Bonds Payable for the face amount.