1. When authorizing bonds to be issued, the board of directors does not specify the a....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
1. When authorizing bonds to be issued, the board of directors does not specify the a. total number of bonds authorized to be sold. b. contractual interest rate. c. selling price. d. total face value of the bonds. 2. A legal document which summarizes the rights and privileges of bondholders as well as the obligations and commitments of the issuing company is called a. a bond indenture. b. a bond debenture. c. trading on the equity. d. a term bond. 3. Which of the following is not an advantage of issuing bonds instead of common stock? a. Stockholder control is not affected. b. Earnings per share on common stock may be lower. c. Income to common shareholders may increase. d. Tax savings result. 4. Bonds that may be exchanged for common stock at the option of the bondholders are called a. options. b. stock bonds. c. convertible bonds. d. callable bonds. 5. Bonds that have specific assets of the issuer pledged as collateral are secured bonds. a. b. callable bonds. c. convertible bonds. d. debenture bonds. 6. A corporation recognizes a gain or loss a only when bonds are converted into common stock. b. only when bonds are redeemed before maturity. c. when bonds are redeemed at or before maturity. d. when bonds are converted into common stock and when they are redeemed before maturity. 7. When bonds are converted into common stock, a. the market price of the stock on the date of conversion is credited to the Common Stock account. b. the market price of the bonds on the date of conversion is credited to the Common Stock account. the market price of the stock and the bonds is ignored when recording the conversion d. gains or losses on the conversion are recognized. 8. In the balance sheet, mortgage notes payable are reported as a. a current liability only. b. a long-term liability only. c. both a current and a long-term liability. d. a current liability except for the reduction in principal amount. 9. A mortgage note payable with a fixed interest rate requires the borrower to make installment payments over the term of the loan. Each installment payment includes interest on the unpaid balance of the loan and a payment on the principal. With each installment payment, indicate the effect on the portion allocated to interest expense and the portion allocated to principal. Portion Allocated Portion Allocated to Interest Expense Increases to Payment of Principal Increases Increases Decreases Decreases Decreases Decreases Increases a. b. C. d. 10. If sixty $1,000 convertible bonds with a carrying value of $70,000 are converted into 9,000 shares of $5 par value common stock, the journal entry to record the conversion is a. Bonds Payable 70,000 Common Stock b. Bonds Payable Premium on Bonds Payable Common Stock c. Bonds Payable Premium on Bonds Payable Common Stock Paid-in Capital in Excess of Par d. Bonds Payable Discount on Bonds Payable Common Stock Paid-in Capital in Excess of Par 60,000 10,000 b. generate earnings. c. meet strategic goals. d. increase trading of the other companies' stock. 60,000 10,000 70,000 11. Corporations invest in other companies for all of the following reasons except to a house excess cash until needed. 12. Which of the following is not a true statement regarding short-term debt investments? a. The securities usually pay interest. b. Investments are frequently government or corporate bonds. c. This type of investment must be currently traded in the securities market. d. Debt investments are recorded at the price paid less brokerage fees. 70,000 70,000 45,000 25,000 10,000 45,000 15,000 1. When authorizing bonds to be issued, the board of directors does not specify the a. total number of bonds authorized to be sold. b. contractual interest rate. c. selling price. d. total face value of the bonds. 2. A legal document which summarizes the rights and privileges of bondholders as well as the obligations and commitments of the issuing company is called a. a bond indenture. b. a bond debenture. c. trading on the equity. d. a term bond. 3. Which of the following is not an advantage of issuing bonds instead of common stock? a. Stockholder control is not affected. b. Earnings per share on common stock may be lower. c. Income to common shareholders may increase. d. Tax savings result. 4. Bonds that may be exchanged for common stock at the option of the bondholders are called a. options. b. stock bonds. c. convertible bonds. d. callable bonds. 5. Bonds that have specific assets of the issuer pledged as collateral are secured bonds. a. b. callable bonds. c. convertible bonds. d. debenture bonds. 6. A corporation recognizes a gain or loss a only when bonds are converted into common stock. b. only when bonds are redeemed before maturity. c. when bonds are redeemed at or before maturity. d. when bonds are converted into common stock and when they are redeemed before maturity. 7. When bonds are converted into common stock, a. the market price of the stock on the date of conversion is credited to the Common Stock account. b. the market price of the bonds on the date of conversion is credited to the Common Stock account. the market price of the stock and the bonds is ignored when recording the conversion d. gains or losses on the conversion are recognized. 8. In the balance sheet, mortgage notes payable are reported as a. a current liability only. b. a long-term liability only. c. both a current and a long-term liability. d. a current liability except for the reduction in principal amount. 9. A mortgage note payable with a fixed interest rate requires the borrower to make installment payments over the term of the loan. Each installment payment includes interest on the unpaid balance of the loan and a payment on the principal. With each installment payment, indicate the effect on the portion allocated to interest expense and the portion allocated to principal. Portion Allocated Portion Allocated to Interest Expense Increases to Payment of Principal Increases Increases Decreases Decreases Decreases Decreases Increases a. b. C. d. 10. If sixty $1,000 convertible bonds with a carrying value of $70,000 are converted into 9,000 shares of $5 par value common stock, the journal entry to record the conversion is a. Bonds Payable 70,000 Common Stock b. Bonds Payable Premium on Bonds Payable Common Stock c. Bonds Payable Premium on Bonds Payable Common Stock Paid-in Capital in Excess of Par d. Bonds Payable Discount on Bonds Payable Common Stock Paid-in Capital in Excess of Par 60,000 10,000 b. generate earnings. c. meet strategic goals. d. increase trading of the other companies' stock. 60,000 10,000 70,000 11. Corporations invest in other companies for all of the following reasons except to a house excess cash until needed. 12. Which of the following is not a true statement regarding short-term debt investments? a. The securities usually pay interest. b. Investments are frequently government or corporate bonds. c. This type of investment must be currently traded in the securities market. d. Debt investments are recorded at the price paid less brokerage fees. 70,000 70,000 45,000 25,000 10,000 45,000 15,000
Expert Answer:
Related Book For
Posted Date:
Students also viewed these accounting questions
-
The board of directors of Morales Publishing, Inc., has commissioned a capital structure study. The company has total assets of $40,000,000. It has earnings before interest and taxes of $8,000,000...
-
The board of directors for Atlantic Corporation met in January to address growing concerns about the declining stock price of the firm. Because the price per share was so low, the board decided that...
-
The board of directors for Atlantic Corporation met in January to address growing concerns about the declining share price of the firm. Because the price per share was so low, the board decided that...
-
An employee received the following benefits: regular compensation income, net of P25,000 SSS, PHIC & HDMF employee share - P850,000; 13th month pay - P120,000; De minimis benefits within their limits...
-
Browne & Assoc., a San Francisco company, orders from U.S. Electronics, a New York company, ten thousand electronic units. Browne & Assoc.s order form provides that any dispute would be resolved by...
-
The author surveyed the Facebook users in one of his statistics classes, asking how many Facebook friends they had. The observations ranged from 0 to 2400 friends, with Q1 = 200, Q2 = 500, and Q3 =...
-
(a) Prove the equivalence (5.25), including the inequalities, for real numbers \(A, B, C\) that fulfill \(A
-
Presented below is information for Yu Co. for the month of January 2012. Cost of goods sold ...... $212,000 Rent expense ........ $32,000 Freight-out .......... 7,000 Sales discounts ......... 8,000...
-
Kindly help me to address the following questions. Thank you. A life insurance company issues a special term assurance policy for a 3-year term. Under the policy, a sum assured of f10,000 is paid at...
-
Blue Computers, a major server manufacturer in the United States, currently has plants in Kentucky and Pennsylvania. The Kentucky plant has a capacity of 1 million units a year, and the Pennsylvania...
-
13-16) 1 Saved Crunchy Chip is a new, low-fat snack cracker created by the Good Health Company. To create interest for the Crunchy Chip, the company sent a free package of the snack crackers to...
-
An investment analyst notices prices for consumer goods, including gasoline, seem to be rising sharply. The analysis decides to observe and study NYMEX's RBOB gasoline futures contract. Market:...
-
At noon, ship A is 180 km west of ship B. Ship A is sailing east at 35 km/h and ship B is sailing north at 30 km/h. How fast is the distance between the ships changing at 4:00 PM?
-
Write a one-paragraph film pitch for an original production.For example, you might choose "documentary" and decide you would like to make a documentary exploring the role of sports in the social life...
-
On January 8, the end of the first weekly pay period of the year, Regis Company's employees earned $27,760 of office salaries and $70,840 of sales salaries. Withholdings from the employees' salaries...
-
The supercritical flow at the toe of a spillway has a depth of 1.12 ft and velocity of 60 ft/s. Determine (a) what type of stilling basin should be used to contain the hydraulic jump; (b) what is the...
-
Jos is a 12-year-old middle schooler who has been bullied by his peers because he has a lisp. He is left out at recess and is always picked last for group projects. Jos spends a lot of time alone at...
-
Identify Thank You mission, strategy and core competencies. Identify strategy changes that have taken place at Thank You since its founding in 2008. Your answer must in text references and must be...
-
Kaminsky Ltd manufactures belts and braces. The firm is organized into five departments. These are belt-making, braces making, and three service departments (maintenance, warehousing and...
-
A recently incorporated power company, set up after the privatization of the electricity and coal industries, owns the following assets. An electricity generating station, capable of being fuelled...
-
The evidence of many recent studies suggests that there are major differences between current theories of investment appraisal and the methods which firms actually use in evaluating long-term...
-
What is meant by refunding?
-
The Merton Manufacturing Co Ltd has been in business for many years making fitted furniture and chairs. During 2004 and 2005 substantial losses have been sustained on the manufacture of chairs and...
-
A company retired a bond issue early, at a loss. Is the company in an economically worse position after the retirement?
Study smarter with the SolutionInn App