1. The contractual rate of interest is usually stated as a(n)Answer

2. Â	Â	monthly rate.
   Â	Â	daily rate.
   Â	Â	semiannual rate.
   Â	Â	annual rate.

 

4 points

Question 2

1.  

   A bond with a face value of $100,000 and a quoted price of 97 has a selling price of

   Answer 

   Â	Â	$97,250.
   Â	Â	$97,025.
   Â	Â	$97,002.
   Â	Â	$97,500.

    

4 points

Question 3

1.  

   The contractual interest rate on a bond is often referred to as the:

   Answer 

   Â	Â	Callable rate.
   Â	Â	the maturity rate.
   Â	Â	market rate.
   Â	Â	stated rate.

    

4 points

Question 4

1.  

   If the market interest rate for a bond is higher than the stated interest rate, the bond will sell at:

   Answer 

   Â	Â	A premium.
   Â	Â	A discount.
   Â	Â	Par.
   Â	Â	Both a and b correct.

    

4 points

Question 5

1.  

   If the market rate of interest is 10%, a $10,000, 12%, 10-year bond that pays interest annually would sell at an amount

   Answer 

   Â	Â	less than face value.
   Â	Â	equal to face value.
   Â	Â	greater than face value.
   Â	Â	that cannot be determined.

    

4 points

Question 6

1.  

   If bonds are issued at a premium, the stated interest rate is

   Answer 

   Â	Â	higher than the market rate of interest.
   Â	Â	lower than the market rate of interest.
   Â	Â	too low to attract investors.
   Â	Â	adjusted to a higher rate of interest.

    

4 points

Question 7

1.  

   Gomez Corporation issues $500,000 10-year, 8% bonds dated January 1, 2010, at 96. The journal entry to record the issuance will show a

   Answer 

   Â	Â	debit to Cash of $500,000.
   Â	Â	credit to Discount on Bonds Payable for $20,000.
   Â	Â	debit to Bonds Payable for $480,000.
   Â	Â	debit to Cash for $480,000.

    

4 points

Question 8

1.  

   Molina Corporation issues 2,000, 10-year, 8%, $1,000 bonds dated January 1, 2010, at 103. The journal entry to record the issuance will show a

   Answer 

   Â	Â	debit to Cash of $2,000,000.
   Â	Â	debit to Premium on Bonds Payable for $60,000.
   Â	Â	credit to Bonds Payable for $2,060,000.
   Â	Â	credit to Cash for $2,060,000.

   Short answer - fill in the blanks below.
   On December 31, 2005, Hanks Service Co. issued $300,000 face value, 9%, 5-year bonds for cash of $ 288,417, a price that yields 10%. Interest is to be paid annually.

   Compute the amount of interest Hanks Co. will pay to bondholders each year during the term of the bonds. ______________

   On January 2,1998, Lang Co. had issued $100,000 of 12% bonds to yield 10%. On January 2, 2000, the Premium on Bonds Payable account had a balance of $8,000. This account shows the unamortized amount of the premium.

   Determine the carrying value of the bonds 1/2/2000. ______________

   Determine the amount paid to bondholders at the maturity date of the bonds, January 2, 2008. ________________

2.  

Alpha Geek

(8)

Status NEW Posted 15 May 2017 05:05 PM My Price 9.00

-----------

Attachments

file 1494868839-497390_1_636300963585879820_497390.xlsx preview (663 words )

Th-----------e c-----------ont-----------rac-----------tua-----------l r-----------ate----------- of----------- in-----------ter-----------est----------- is----------- us-----------ual-----------ly -----------sta-----------ted----------- as----------- a -----------(n)-----------A) -----------Mon-----------thl-----------y r-----------ate-----------.B)----------- Da-----------ily----------- ra-----------te.-----------C) -----------Sem-----------ian-----------nua-----------l r-----------ate-----------.D)----------- An-----------nua-----------l r-----------ate-----------It -----------is -----------usu-----------all-----------y s-----------tat-----------ed -----------as -----------an -----------ann-----------ual----------- ra-----------te -----------alt-----------hou-----------gh -----------the----------- pa-----------yme-----------nts----------- ar-----------e m-----------ost-----------ly -----------mad-----------e m-----------ont-----------hly-----------.Co-----------ntr-----------act-----------ual----------- in-----------ter-----------est----------- ra-----------te -----------is -----------the----------- ra-----------te -----------whi-----------ch -----------has----------- be-----------en -----------sta-----------ted----------- on----------- a -----------not-----------e p-----------aya-----------ble----------- or----------- bo-----------nd -----------pay-----------abl-----------e. -----------Gen-----------era-----------lly----------- th-----------is -----------rat-----------e w-----------ill----------- re-----------mai-----------n f-----------ixe-----------d a-----------nd -----------not----------- ch-----------ang-----------ed -----------dur-----------ing----------- th-----------e l-----------ife----------- ti-----------me -----------of -----------the----------- co-----------mpa-----------ny.----------- Qu-----------est-----------ion----------- 2A----------- bo-----------nd -----------wit-----------h a----------- fa-----------ce -----------val-----------ue -----------of

Not Rated(0)

• Buy Answer