ACCT 2013 - Concept 2

1. 1A bond that matures in installments at regular intervals is a

   1. AConvertible bond
   2. BCallable bond
   3. CSerial bond
   4. DTerm bond
2. 2A corporation may want to call bonds when

   1. AInterest rates go up
   2. BInterest rates go down
   3. CDividends are declared
   4. DThe corporation has cash flow problems
3. 3Convertible bonds are bonds which can be converted into

   1. ACash
   2. BStock
   3. CTreasury Stock
   4. DAccounts Receivable
4. 4Bonds Payable should be disclosed on the balance sheet

   1. AAt their face value minus any unamortized premiums.
   2. BAt their face value plus any unamortized premiums.
   3. CAt their maturity value.
   4. DAt face value.
5. 5On January 1, Lightbulbs, Inc. issued 5-year bonds with a $400,000 face value. The bonds have a contract rate of 6% and were issued at 96. What is the bond interest expense on the first semi-annual interest payment date using straight-line amortization?

   1. A$10,400
   2. B$13,600
   3. C$12,000
   4. D$24,000
6. 6When the contract interest rate for a bond exceeds the effective interest rate of the bond, then:

   1. AThe price of the bond will be equal to the future cash flow associated with the bond.
   2. BThe price of the bond will be issued at a premium.
   3. CThe bond will be issued at a discount.
   4. DThe face value of the bond will fluctuate over its life.

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ACCT 2013 Quiz on ACCT 2013 - Concept 2, created by Adam Peterson on 19/01/2018.

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