_account 1.A cash dividend will ultimately decrease the cash account and the Common Stock b. Preferred Stock C. Retained Earnings d. Cash Dividends Declarded 2. When the corporation issuing the bonds has the right to redeem the bonds prior to the maturity. the bonds are convertible bonds unsecured bonds debenture bonds callable bonds 3. If $2,000,000 of 10% bonds are issued at 93, the amount of cash received from the sale is $2,046,000 $2,000,000 $1,860,000 $1,674,000 4. The interest rate specified in the bond indenture is called the discount rate contract rate C. market rate effective rate d. 5. When the maturities of a bond issue are spread over several dates, the bonds are called serial bonds b. bearer bonds debenture bonds term bonds 6. Selling the bonds at a premium has the effect of a. raising the effective interest rate above the stated interest rate b. attracting investors that are willing to pay a lower rate of interest than on similar bonds causing the interest expense to be higher than the bond interest paid d. causing the interest expense to be lower than the bond interest paid C. a. 7. A bond indenture is a contract between the corporation issuing the bonds and the underwriters selling the bonds the amount due at the maturity date of the bonds a contract between the corporation issuing the bonds and the bondholders the amount for which the corporation can buy back the bonds prior to the maturity date