Do not respond unless you can answer all 5 questions.

Question 6

If a bond was sold at 97, the market rate of interest was:

		Equal to the coupon rate
		Greater than the stated rate
		Equal to the stated rate
		Less than the stated rate

Question 7

How should the value of warrants attached to a debt security be account for?

		No value assigned
		A separate portion of paid-in capital
		An appropriation of retained earnings
		A liability

Question 8

When it is necessary to impute an interest rate in connection with a note payable, the rate should be

		Two-thirds of the prime rate effective at the time the obligation is incurred
		The same as that used in the GNP Implicit Price Deflator
		At least equal to the rate at which the debtor can obtain financing of a similar nature from other sources at the date of the transaction
		As near zero as can be justified

Question 9

Financial leverage refers to the

		Amount of working capital
		Amount of capital provided by owners
		Use of borrowed money to increase the return to owners
		Number of times interest is earned

Question 10

An unearned revenue is an example of a(an)

		Deferred credit.
		Accrued liability.
		Customer billing that takes place before a job is finished.
		Accounts receivable.