1. A retractable bond is one which allows the:

Multiple Choice

• Borrower to pay back prior to the maturity date

• Investor to force payment on the bond

• Borrower to renegotiate the terms and conditions of the loan one year from the maturity date.

• Investor to increase the interest rate on the bond.

2. When bonds are issued between interest dates:

Multiple Choice

• accrue interest since the last interest date is deducted from the market price and the bond issue.

• The initial journal entry at issuance is unaffected by the time of sale.

• The determination of the price of the bonds is simplified.

• The entry to record the issuance of the bonds will include a credit to interest expense.

3. XBRL Inc. has debt denominated in a foreign currency. At the report date, the debt is reported at the spot rate for that date and assuming the rate has changed

Multiple Choice

• The gain or loss is recorded in income.

• The gain or loss is recorded in other comprehensive income.

• The gain or loss is deferred and amortized over the period of the debt.

• There is no gain or loss to report.

4. Assuming a bond is sold at a discount and the effective interest method is used as maturity approaches,

Multiple Choice

• The unamortized amount decreases and the annual interest increases.

• The unamortized amount decreases and the annual interest decreases.

• The unamortized amount increases and the annual interest increases.

• The unamortized amount increases and the annual interest decreases.