Question 1

If $1,000,000 of 8% bonds are issued at 103 1/2, the amount of cash received from the sale is

Accepted Answer

A)   $1,080,000
B)   $965,000
C)   $1,000,000
D)   $1,035,000E) C) and D)
F) B) and D)

Question 2

Given the following data, determine the times interest earned ratio.
Net income - $70,000
Bonds Payable (issued at face value), 8% - $5,000,000
Preferred Stock ($50 par value, 6%, 10,000 shares issued & outstanding)
Tax rate - 30%

Accepted Answer

The answer of Given the following data, determine the times...

Question 3

Debenture bonds are

Accepted Answer

A)   bonds secured by specific assets of the issuing corporation
B)   bonds that have a single maturity date
C)   issued only by the federal government
D)   issued on the general credit of the corporation and do not pledge specific assets as collateral.E) A) and B)
F) A) and C)

Question 4

The balance in Premium on Bonds Payable

Accepted Answer

A)   should be reported on the balance sheet as a deduction from the related bonds payable
B)   should be allocated to the remaining periods for the life of the bonds by the straight-line method, if the results obtained by that method materially differ from the results that would be obtained by the interest method
C)   would be added to the related bonds payable on the balance sheet
D)   should be reported in the paid-in capital section of the balance sheetE) B) and D)
F) A) and B)

Question 5

The higher the times interest earned ratio, the better the creditors' protection.

Accepted Answer

A) True 
 B)False

Exam 14: Long-Term Liabilities: Bonds and Notes

The higher the times interest earned ratio, the better the creditors' protection.

Correct Answer
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Given the following data, determine the times interest earned ratio. Net income - $70,000 Bonds Payable (issued at face value), 8% - $5,000,000 Preferred Stock ($50 par value, 6%, 10,000 shares issued & outstanding) Tax rate - 30%

Correct Answer
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Debenture bonds are

Correct Answer
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If $1,000,000 of 8% bonds are issued at 103 1/2, the amount of cash received from the sale is

Correct Answer
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The balance in Premium on Bonds Payable

Correct Answer
verified

Exam 14: Long-Term Liabilities: Bonds and Notes

The higher the times interest earned ratio, the better the creditors' protection.

Correct AnswerverifiedShow Answer

Given the following data, determine the times interest earned ratio. Net income - $70,000 Bonds Payable (issued at face value), 8% - $5,000,000 Preferred Stock ($50 par value, 6%, 10,000 shares issued & outstanding) Tax rate - 30%

Correct AnswerverifiedShow Answer

Debenture bonds are

Correct AnswerverifiedShow Answer

If $1,000,000 of 8% bonds are issued at 103 1/2, the amount of cash received from the sale is

Correct AnswerverifiedShow Answer

The balance in Premium on Bonds Payable

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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