The journal entry to record the issuance of a $1,000 bond that is sold at 99.5 would include: O A credit to the Discount on Bond account of $5 A credit to cash for $995 A debit to the Discount on Bond of $5 O A credit to bonds payable for $995. QUESTION 9 A bond sold at a premium reduces the cost of borrowing. True False QUESTION 10 Interest rates set on bonds are stated: a. as an annual interest rate b. as a quarterly interest rate c. as a semi-annual interest rate d. None of the above. The cost of borrowing to a company that issues bond is equal total interest expense over the life of the bond. True False QUESTION 6 Solvency ratios like the debt to assets ratio: O a. shows the ratio of total assets divided by total liabilities. O b. show the ratio of total liabilites to current assets. c. shows whether the business will survive more than a year into the future. d. measures whether the company can survive for the next year. QUESTION 7 A $10,000 bond is sold at 100. What can be said about the contractual interest rate in comparison to the market interest rate? O Nothing. There isn't enough information to determine. The contractual interest rate is less than the market rate. The contractual interest rate is less than the market rate The contractual interest rate and market interest rate are equal