Homework Answers
| 45 | The stated interest rate is more than the market interest rate. | E. Bonds issued at a premium |
| 46 | The stated interest rate is less than the market interest rate. | C. Bonds issued at a discount |
| 47 | The rate quoted in the bond contract used to calculate the cash payments for interest. | B. Stated interest rate |
| 48 | The stated interest rate equals the market interest rate. | D. Bonds issued at face value |
| 49 | The true interest rate used by investors to value a bond. | A. Market interest rate |
| 50 | The mixture of liabilities and stockholders' equity a business uses. | F. Capital structure |
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Match the following definitions with the terms below: 45. The stated interest rate is more than...
Terms and Definitions The interest rate paid on the face amount of a bond is called...
Terms and Definitions The interest rate paid on the face amount of a bond is called the contract rate of interest. The interest rate paid on similar risk bonds is called the market rate of interest. When the contract rate of interest is less than the market rate of interest, the bonds will sell for less than their face value. The difference between the selling price and the face amount of the bonds in this case is called a discount...
Bond prices depend on the market rate of interest, stated rate of interest
Bond prices depend on the market rate of interest, stated rate of interest, and time. Determine whether the following bonds payable will be issued at face value, at a premium, or at a discount:a. The market interest rate is 8%. Denton issues bonds payable with a stated rate of 7.75%.b. Starkville issued 8% bonds payable when the market interest rate was 8.25%.c. Houston issued 6% bonds when the market interest rate was 10%.d. Federal issued bonds payable that pay the...
Bond prices depend on the market rate of interest, stated rate of interest, and time. Determine...
Bond prices depend on the market rate of interest, stated rate of interest, and time. Determine whether the following bonds payable will be issued at face value, at a premium, or at a discount: a. The market interest rate is 8%, Idaho issues bonds payable with a stated rate of 2.75% b. Austin issued 9% bonds payable when the market interest rate was 8.25% c. Cleveland's Cars issued 10% bonds when the market interest rate was 10% d. Atlanta's Tourism...
What is a bond? What is face/principal value? What is maturity value? What is stated interest...
What is a bond? What is face/principal value? What is maturity value? What is stated interest rate? What the types of bonds and be able to define each one? What is a bond issued at premium, at discount or par (face) value mean? What is market interest rate? What is maturity date? Why do investors buy bonds? What is leverage? What is debt-to-equity ratio?
When the stated interest rate is lower than the effective interest rate for a long-term note...
When the stated interest rate is lower than the effective interest rate for a long-term note receivable, the note is issued at a value that reflects an average of the stated and effective interest rates. a premium. face value. a discount.
A bond is issued at discount ________. when a bond's stated interest rate is more than...
A bond is issued at discount ________. when a bond's stated interest rate is more than the effective interest rate when a bond's stated interest rate is less than the market interest rate when a bond's stated interest rate is equal to the market interest rate when a bond's stated interest rate is higher than the market interest rate
Your company issues bonds with a face value of $500,000. The stated rate is 4%, interest is paid semi- annually, and the...
Your company issues bonds with a face value of $500,000. The stated rate is 4%, interest is paid semi- annually, and the bonds mature in 10 years. The bonds are issued with an effective yield of 4.125% The bonds are issued at a [ Select ] ["Discount", "Premium", "Par"] The bonds are sold for [...
36. If bonds are issued initially at a premium and the effective-interest method of amortization is...
36. If bonds are issued initially at a premium and the effective-interest method of amortization is used, interest expense in the earlier years will be A) greater than if the straight-line method were used. B) greater than the amount of the interest payments. C) the same as if the straight-line method were used. D) less than if the straight-line method were used. 37. Stockholders' equity is generally classified into two major categories: A) contributed capital and appropriated capital. B) appropriated...
What’s the answers 24) Which of the following describes a serial bond? 24) A) a bond...
What’s the answers
24) Which of the following describes a serial bond? 24) A) a bond that matures at one specified time в) a bond that is not backed by specific assets C) a bond that matures in installments at regular intervals D) a bond that gives the bondholder a claim for specific assets 25) A bond is issued at premium_ 25) A) when a bond's stated interest rabe is higher than the market interest rale B) when a bond's...
Please complete all parts. Thank you Journalize issuance of the bond and the first semiannual interest...
Please complete all parts. Thank you
Journalize issuance of the bond and the first semiannual interest payment under each of the three assumptions. The company amortizes bond premium and discount by the effective-interest amortization method. Explanations are not required. (Record debits first, then credits. Exclude explanations from any journal entries. Round your final answers to the nearest whole dollar.) Assumption 1. Seven-year bonds payable with face value of $85,000 and stated interest rate of 10%, paid semiannually. The market rate...
Terms and Definitions The interest rate paid on the face amount of a bond is called the contract rate of interest. The interest rate paid on similar risk bonds is called the market rate of interest. When the contract rate of interest is less than the market rate of interest, the bonds will sell for less than their face value. The difference between the selling price and the face amount of the bonds in this case is called a discount...
Bond prices depend on the market rate of interest, stated rate of interest, and time. Determine whether the following bonds payable will be issued at face value, at a premium, or at a discount: a. The market interest rate is 8%, Idaho issues bonds payable with a stated rate of 2.75% b. Austin issued 9% bonds payable when the market interest rate was 8.25% c. Cleveland's Cars issued 10% bonds when the market interest rate was 10% d. Atlanta's Tourism...
What is a bond? What is face/principal value? What is maturity value? What is stated interest rate? What the types of bonds and be able to define each one? What is a bond issued at premium, at discount or par (face) value mean? What is market interest rate? What is maturity date? Why do investors buy bonds? What is leverage? What is debt-to-equity ratio?
36. If bonds are issued initially at a premium and the effective-interest method of amortization is used, interest expense in the earlier years will be A) greater than if the straight-line method were used. B) greater than the amount of the interest payments. C) the same as if the straight-line method were used. D) less than if the straight-line method were used. 37. Stockholders' equity is generally classified into two major categories: A) contributed capital and appropriated capital. B) appropriated...
What’s the answers
24) Which of the following describes a serial bond? 24) A) a bond that matures at one specified time в) a bond that is not backed by specific assets C) a bond that matures in installments at regular intervals D) a bond that gives the bondholder a claim for specific assets 25) A bond is issued at premium_ 25) A) when a bond's stated interest rabe is higher than the market interest rale B) when a bond's...
Please complete all parts. Thank you
Journalize issuance of the bond and the first semiannual interest payment under each of the three assumptions. The company amortizes bond premium and discount by the effective-interest amortization method. Explanations are not required. (Record debits first, then credits. Exclude explanations from any journal entries. Round your final answers to the nearest whole dollar.) Assumption 1. Seven-year bonds payable with face value of $85,000 and stated interest rate of 10%, paid semiannually. The market rate...
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