1. When the market interest rate rises, what happens to bond prices? Group of answer choices They rise They stay the same Cannot be determined They fall 2. A bond discount occurs when: Group of answer choices The price of a bond is above its face value. The price of a bond is above its maturity value. The price of a bond is below its face value. The price of the bond is equal to a bond's face value. 3. When a bond sells for a premium, Group of answer choices The price is above the face value The price is equal to the face value. The price is below the face value The price is below the maturity value. 4. A bond has a face value of $100,000 and a price of $97,000. The journal entry at the date of issuance would include: Group of answer choices A credit to Bond Discount of 3,000 A debit to Bond Discount of 97,000 A debit to Bond Discount of 3,000 A credit to Bond Premium of 3,000 5. A bond has a face value of $100,000 and a price of $102,000. The journal entry would include: Group of answer choices A credit to Bond Premium of 2,000 A credit to Bond Discount of 2,000 A debit to Bond Premium of 2,000 A debit to Bond Discount of 2,000
1. When the market interest rate rises, what happens to bond prices? Group of answer choices They rise They stay the same Cannot be determined They fall 2. A bond discount occurs when: Group of answer choices The price of a bond is above its face value. The price of a bond is above its maturity value. The price of a bond is below its face value. The price of the bond is equal to a bond's face value. 3. When a bond sells for a premium, Group of answer choices The price is above the face value The price is equal to the face value. The price is below the face value The price is below the maturity value. 4. A bond has a face value of $100,000 and a price of $97,000. The journal entry at the date of issuance would include: Group of answer choices A credit to Bond Discount of 3,000 A debit to Bond Discount of 97,000 A debit to Bond Discount of 3,000 A credit to Bond Premium of 3,000 5. A bond has a face value of $100,000 and a price of $102,000. The journal entry would include: Group of answer choices A credit to Bond Premium of 2,000 A credit to Bond Discount of 2,000 A debit to Bond Premium of 2,000 A debit to Bond Discount of 2,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
1. When the market interest rate rises, what happens to bond prices ?
Group of answer choices
They rise
They stay the same
Cannot be determined
They fall
2. A bond discount occurs when:
Group of answer choices
The price of a bond is above its face value.
The price of a bond is above its maturity value.
The price of a bond is below its face value.
The price of the bond is equal to a bond's face value.
3. When a bond sells for a premium,
Group of answer choices
The price is above the face value
The price is equal to the face value.
The price is below the face value
The price is below the maturity value.
4. A bond has a face value of $100,000 and a price of $97,000. The journal entry at the date of issuance would include:
Group of answer choices
A credit to Bond Discount of 3,000
A debit to Bond Discount of 97,000
A debit to Bond Discount of 3,000
A credit to Bond Premium of 3,000
5. A bond has a face value of $100,000 and a price of $102,000. The journal entry would include:
Group of answer choices
A credit to Bond Premium of 2,000
A credit to Bond Discount of 2,000
A debit to Bond Premium of 2,000
A debit to Bond Discount of 2,000
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