1.Bonds that are backed only by the credit of the issuing company are: A.collateral bonds. B.term...
1.Bonds that are backed only by the credit of the issuing company are:
A.collateral bonds.
B.term bonds.
C.unsecured bonds.
D.callable bonds.
2. A $5,000 bond issue with a stated interest rate of 11%, when the market rate of interest is 11%, means that the bond will sell for:
A.$5,000
B.less than $5,000.
C.more than $5,000.
D.$5,550.
Homework Answers
|
1. Option C Bonds which are backed only by the credit of issuing company are unsecured bonds |
|
2. Option A As market rate of interest and stated rate of interest are equal |
Add Answer to:
1.Bonds that are backed only by the credit of the issuing
company are:
A.collateral bonds.
B.term...
Bonds that are backed only by the credit of the issuing company are: O A. unsecured bonds. OB. term bonds. O c. col...
Bonds that are backed only by the credit of the issuing company are: O A. unsecured bonds. OB. term bonds. O c. collateral bonds. OD. callable bonds.
1. From the standpoint of the issuing company, a disadvantage of using bonds as a means...
1. From the standpoint of the issuing company, a disadvantage of using bonds as a means of long-term financing is that A. bond interest is deductible for tax purposes. B. interest must be paid on a periodic basis regardless of earnings. C. income to stockholders may increase as a result of trading on the equity D. the bondholders do not have voting rights. 2. Bonds that mature at a single specified future date are called A. coupon bonds. B. term...
Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its...
Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $10,600,000 of five-year, 9% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 11%, resulting in Chin Company receiving cash of $9,801,008. a. Journalize the entries to record the following: Issuance of the bonds. First semiannual interest payment. The bond discount...
Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its...
Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $21,000,000 of five-year, 11% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 12%, resulting in Chin Company receiving cash of $20,227,094. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual interest payment. The...
3) Convertible bonds are attractive to investors because A) the issuing company cannot retire the bonds...
3) Convertible bonds are attractive to investors because A) the issuing company cannot retire the bonds before maturity. B) they can be converted into stock by the issuing company. C) they usually carry a higher rate of interest than non-convertible bonds. D) they usually carry a lower rate of interest than non-convertible bonds. E) they can be converted into stock at the holder's option. 4) The cash proceeds received from issuing a bond are less than the face value of...
Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its...
Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $25,800,000 of five-year, 10% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 11%, resulting in Chin Company receiving cash of $24,827,637. a. Journalize the entries to record the following: Issuance of the bonds. First semiannual interest payment. The bond discount...
To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is...
To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is essential For example: • A bond's refers to the interest payment or payments paid by a bond. A bond issuer is said to be in if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue's restrictive covenants. • The contract that describes the terms of...
Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its...
Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $27,200,000 of five-year, 4% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 6%, resulting in Chin receiving cash of $24,879,677. a. Journalize the entries to record the following: Issuance of the bonds. First semiannual interest payment. The bond discount is...
please answer all four multiple choice questions QUESTION 17 Outstanding shares represent the 1. maximum number...
please answer all four multiple choice questions
QUESTION 17 Outstanding shares represent the 1. maximum number of shares that can be sold by the corporation. 2. number of shares that are currently held by stockholders. 3. number of previously issued shares that have been repurchased by the corporation. 4.number of shares that the corporation has sold. QUESTION 18 The Discount on Bonds Payable account is shown on the balance sheet as 1. an asset. 2. an expense. 3. a contra-liability...
1. On January 1, Year 1, Price Co. issued $393,000 of five-year, 6 percent bonds at...
1. On January 1, Year 1, Price Co. issued $393,000 of five-year,
6 percent bonds at 95. Interest is payable annually on December 31.
The discount is amortized using the straight-line method.
Required
Prepare the journal entries to record the bond transactions for
Year 1 and Year 2.
- Record the entry for issuance of bonds
-Record the entry for recognizing interest expense on Dec. 31,
Year 1
-Record the entry for recognizing interest expense on Dec. 31,
Year...
Bonds that are backed only by the credit of the issuing company are: O A. unsecured bonds. OB. term bonds. O c. collateral bonds. OD. callable bonds.
1. From the standpoint of the issuing company, a disadvantage of using bonds as a means of long-term financing is that A. bond interest is deductible for tax purposes. B. interest must be paid on a periodic basis regardless of earnings. C. income to stockholders may increase as a result of trading on the equity D. the bondholders do not have voting rights. 2. Bonds that mature at a single specified future date are called A. coupon bonds. B. term...
Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $21,000,000 of five-year, 11% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 12%, resulting in Chin Company receiving cash of $20,227,094. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual interest payment. The...
3) Convertible bonds are attractive to investors because A) the issuing company cannot retire the bonds before maturity. B) they can be converted into stock by the issuing company. C) they usually carry a higher rate of interest than non-convertible bonds. D) they usually carry a lower rate of interest than non-convertible bonds. E) they can be converted into stock at the holder's option. 4) The cash proceeds received from issuing a bond are less than the face value of...
To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is essential For example: • A bond's refers to the interest payment or payments paid by a bond. A bond issuer is said to be in if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue's restrictive covenants. • The contract that describes the terms of...
please answer all four multiple choice questions
QUESTION 17 Outstanding shares represent the 1. maximum number of shares that can be sold by the corporation. 2. number of shares that are currently held by stockholders. 3. number of previously issued shares that have been repurchased by the corporation. 4.number of shares that the corporation has sold. QUESTION 18 The Discount on Bonds Payable account is shown on the balance sheet as 1. an asset. 2. an expense. 3. a contra-liability...
1. On January 1, Year 1, Price Co. issued $393,000 of five-year,
6 percent bonds at 95. Interest is payable annually on December 31.
The discount is amortized using the straight-line method.
Required
Prepare the journal entries to record the bond transactions for
Year 1 and Year 2.
- Record the entry for issuance of bonds
-Record the entry for recognizing interest expense on Dec. 31,
Year 1
-Record the entry for recognizing interest expense on Dec. 31,
Year...
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