If market interest rates are higher than the rate offered on, Accounting Basics

Assignment Help:

 

1. If market interest rates are higher than the rate offered on the bonds being sold, they will be sold at:
A. a premium.

B. a discount.

C. face value.

D. a loss.


2. When bonds are issued at a premium, the bond premium:
A. reduces the amount of interest expense over the life of the bonds.

B. increases the amount of interest expense over the life of the bonds.

C. does not change the amount of interest expense over the life of the bonds.

D. is charged to interest expense when the bond is issued.


3. If bonds are issued for a price below their face value, the bond discount should be:
A. charged to expense on the date the bonds are issued.

B. amortized over the life of the bond issue.

C. shown as an addition to Bonds Payable in the Long-Term Liabilities section of the balance sheet.

D. shown as a current liability on the balance sheet.

 


Related Discussions:- If market interest rates are higher than the rate offered on

What is the mission of the accounting and finance, what is the mission of t...

what is the mission of the Accounting and Finance Functional Area

Ethics on corporate governance, Critique the Ethics of those involved in th...

Critique the Ethics of those involved in the News of the World phone hacking scandal. Demonstrate in your critical analysis how the use of Ethics by the parties involved could have

accounts receivable for small busines, How vital does Accounts receivable ...

How vital does Accounts receivable for small business and why?        Ans) Accounts Receivables help small businesses by giving short-term liquidity. Also continued sales on cre

Ledger, “Ledger is said to be the principal book entry and the transactions...

“Ledger is said to be the principal book entry and the transactions can even be directly entered into the ledger account.”

Uses of the profit and loss account, Uses of the Profit and Loss Account ...

Uses of the Profit and Loss Account 1) The key utilize is to monitor and calculate profit. This suppose that the informat ion recording is correct. Significant harms can arise

Measurement of expense, The measurement of expense Accountants measure larg...

The measurement of expense Accountants measure largely assets used in operating a business by their historical costs. Consequently they measure a depreciation expense resulting fro

At the end of the current year, At the end of the current year, $19,900 of ...

At the end of the current year, $19,900 of fees have been earned but not billed to clients. • a. What is the adjustment to record the accrued fees? Indicate each account affecte

What is gross selling price, Q. What is Gross selling price? When a sal...

Q. What is Gross selling price? When a sale is on account it credits the Sales account as well as debits Accounts Receivable. The following entry records a USD 20000 sale on ac

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd