A. How does the general journal entry for a stock split differ from one for a stock dividend?

1. Stock splits require a debit to Retained Earnings for market value of stock.
2. Stock splits require a credit to the stock account on date of declaration for the par value of stock.
3. A stock split does not require a journal entry except a memorandum entry.
4. Stock splits require a debit to Retained Earnings for face amount of stock.

B. What is a convertible bond?

1. A bond that may change its maturity date.
2. A bond that may be converted to stock.
3. A bond that may change its interest payments
4. A form of stockholder equity.

C. Bonds that are payable over a period of years are called:

1. Callable bonds.
2. Bearer bonds.
3. Serial bonds.
4. Coupon bonds.

D. What is the straight-line method for amortizing bond discount or premium?

1. An increasing amount of amortization is recorded each period
2. Decreasing amount of amortization is taken each period
3. Same amount of amortization is taken each period
4. Large amount of amortization taken in first year followed by same amount in the remainder of the years

E. The entry to record the issuance of bonds includes a:

1. Debit to Bonds Payable.
2. Debit to Bond Interest Payable.
3. Credit to Bonds Payable.
4. Credit to Bond Interest Payable.