29 Jun Question Question 1 of 30 3.3334 Points
Question
Question 1 of 30 3.3334 Points
Condi Corporation sells $100,000, 12%, 10-year bonds for 97 on January 1, 2009. Interest is paid on January 1 and July 1. Straight-line amortization is used. The amount of interest paid on July 1, 2009 is:
A. $6,000.
B. $5,850.
C. $12,000.
D. $6,150.
Question 2 of 30 3.3334 Points
A bond payable is similar to which of the following?
A. Accounts Payable
B. Notes Payable
C. Accounts Receivable
D. Cash
Question 3 of 30 3.3334 Points
For a corporation, a premium on bonds results when:
A. the contract rate is less than the market rate.
B. the contract rate is greater than the market rate.
C. the face value is greater than the effective rate.
D. None of these answers are correct.
Question 4 of 30 3.3334 Points
When the contract rate of interest on bonds is equal to the market rate of interest, bonds sell at:
A. a premium.
B. their face value.
C. a discount.
D. their maturity value.
Question 5 of 30 3.3334 Points
Bailey Corporation has decided to issue bonds pledging specific assets. What type of bonds is it offering?
A. Secured bonds
B. Debenture bonds
C. Serial bonds
D. Convertible bonds
Question 6 of 30 3.3334 Points
Bond Interest Payable is reported as a:
A. contra-liability on the balance sheet.
B. current liability on the income statement.
C. contra-liability on the income statement.
D. current liability on the balance sheet.
Question 7 of 30 3.3334 Points
Carrying value is the same thing as:
A. fair market value.
B. discount value.
C. book value.
D. premium value.
Question 8 of 30 3.3334 Points
The contract rate for a bond is:
A. the annual interest rate based on face value.
B. the annual interest rate based on selling price.
C. the annual interest rate based on market value.
D. None of these answers are correct.
Question 9 of 30 3.3334 Points
Davis Corporation sells $100,000, 12%, 10-year bonds for 103 on January 1. Compute the semi-annual interest expense recorded on July 1 using the interest method. The market rate is 8%.
A. $12,000
B. $8,240
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