Reference no: EM132953382

Problem 1: Blended payment loans require a loan amortization schedule separating principal and interest. This is required, in part, because

A) interest only is reflected on the cash flow statement.
B) interest and principal needs to be reflected under current and not current liabilities section of the statement of financial positon.
C) the interest expense is recorded separately from the reduction of the loan payable.
D) none of the above.

Problem 2: If a bond is trading at 98 the

A) the interest expense is greater than the interest payment.
B) the interest expense is less than the interest payment.
C) the interest expense is equal to the interest payment.
D) the interest expense can not be determined.

Problem 3: Which of the following would best describe a contingent liability?

A) An obligation to transfer services instead of cash to settle a liability.
B) An obligation where the costs will be covered by insurance.
C) An obligation with a high degree of uncertainty about the amount or timing of the payment.
D) An obligation with a low degree of uncertainty about the amount or timing of the payment.