1. The ratio that measures the income earned by each share of common stock is:

A. number of times interest charges are earned

B. dividend yield

C. earnings per share

D. dividend per share

2. A bond that gives the bondholder a right to exchange the bond for other securities under certain conditions is called a:

A. convertible bond

B. sinking bond

C. term bond

D. debenture bond

3. Bonds that are issued on the basis of the general credit of the corporation are called:

A. callable bonds

B. convertible bonds

C. debenture bonds

D. term bonds

4. If the market rate of interest is less than the coupon rate of interest, the bonds will sell for a:

A. discount

B. face value

C. maturity value

D. premium

5. The entry to record the amortization of a discount on bonds payable is:

A. debit Bonds Payable; credit Interest Expense

B. debit Interest Expense; credit Discount on Bonds Payable

C. debit Discount on Bonds Payable; credit Interest Expense

D. debit Discount on Bonds Payable; credit Bonds Payable