ACCT 211 Learnsmart Assignment 10 Liberty University Solution

Which of the following statements is not an advantage of bond financing?

A company issues \$100,000 of 5%, 10-year bonds dated January 1. The bonds pay interest semiannually on June 30 and December 31 each year. If bonds are sold at par value, the issuer records the sale with a debit to in the amount of \$ .

A company issues \$75,000 of 6%, 10-year bonds dated January 1 that pay interest semiannually on each June 30 and December 31. If the issuer accepts \$69,000 for the bonds, the issuer will record the sale with a debit to which of the following accounts?

When the contract rate of the bonds is higher than the market rate, the bond sells at a higher price than par value. The amount by which the bond price exceeds par value is the ___ on bonds.

A company issues \$50,000 of 5%, 10-year bonds dated January 1 and pay interest semiannually on June 30 and December 31 each year. The bonds are sold for \$48,000. Using the straight-line amortization method, the company will amortize the discount by \$__ on each semiannual interest payment.

The legal document that describes the rights and obligations of both the bondholders and the issuers is called the bond _____.

A company issues \$60,000 of 6%, 5-year bonds dated January 1 that pay interest semiannually on June 30 and December 31 each year. If the issuer accepts \$62,000 for the bonds, the premium on bonds payable will __ total interest expense recognized over the life of the bond by \$____.

A company issues \$90,000 of 5%, 5-year bonds dated January 1 that pay interest semiannually on June 30 and December 31 each year. If the issuer accepts \$95,000 for the bond, the issuer will record the sale with a to on bonds payable in the amount of \$5,000.

Total bond interest is the sum of the interest payments plus the bond discount.

Which of the following are true of amortizing a premium bond using the effective interest amortizing method:

The bond carrying value can be determined by which of the following formulas?

A company issues \$500,000 of 6%, 10-year bonds dated January 1, 2017 that mature on December 31, 2026. The bonds pay interest semiannually on June 30 and December 31 each year. If bonds are sold at par value, the issuer records the sale with which of the following entries?

A company borrows \$60,000 by signing a \$60,000, 8%, 6-year note that requires equal payments of \$12,979 at the end of each year. The first payment will record interest expense of \$4,800 and will reduce principal by \$ ___.

The bond amortization method allocates an equal portion of the total bond interest expense to each interest period.

Bond market values are expressed as a percentage of their par (face) value. For example, a company's bonds might be reading at 103, meaning that they can be bought or sold for ___ of their par value.

When the market rate is 8%, a company issues \$50,000 of 9%, 10-year bonds dated January 1, 2017, that mature on December 31, 2026, and pay interest semiannually for a selling price of \$60,000. When the bonds mature, the issuer records its payment of principal with a to Bonds Payable in the amount of .