A bond has a nominal interest rate of treasury bond rate plus 5%. This same bond requires the entity to have its investment property as collateral. This would indicate that it is a/an * A. Mortgage bond with a variable rate B. Equipment trust bond with a variable rate C. Mortgage bond with a fix rate D. Equipment trust bond with a fix rate

A bond has a nominal interest rate of treasury bond rate plus 5%. This same bond requires the entity to have its investment property as collateral. This would indicate that it is a/an * A. Mortgage bond with a variable rate B. Equipment trust bond with a variable rate C. Mortgage bond with a fix rate D. Equipment trust bond with a fix rate

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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6. Which of the following is true of demand bonds?a. They give the issuer the right to call the bonds at a preestablished price.b. They give the issuer the right to demand that the bondholders purchase additional bonds at a preestablished price.c. They give the bondholder the right to demand repayment prior to maturity.d. They give the bondholder the right of first refusal with respect to any additional bonds sold by the issuer. 7. Demand bonds should be reported as governmental fund liabilitiesa. if the government has not entered into a take-out agreement.b. if prevailing interest rates are higher than the interest rate on the bonds.c. if prevailing interest rates are lower than the interest rate on the bonds.d. if the government, by the time it issues its financial statements, has neither refinanced the bonds nor entered into an agreement to do so.
All of the following refer to the face rate of interest on a bond except: a. stated rate b. effective rate c. nominal rate d. coupon rate
For a standard U.S. Treasury bond, when are the following characteristics of the bond determined? The amounts of any interest payments. The dates of any interest payments. The bond's market yield. The bond's market price. The amount that the Treasury returns to the bondholder, when the bond matures. The price that the bondholder pays to the Treasury to acquire the bond. The maturity date. 1. 2. Fixed before the bonds are sold and does not change. Fixed when the bonds are sold and does not change. 3. Fluctuates continually.
When a company uses the the effective-interest method to amortize a bond discount amortization, the interest expense is equal to a) the market rate multiplied by the beginning-of-period carrying amount of the bonds. b) the market rate of interest multiplied by the face value of the bonds. c) the stated rate multiplied by the beginning-of-period carrying amount of the bonds. d) the stated (nominal) rate of interest multiplied by the face value of the bonds.
From page 9-3 of the VLN, when determining the issue price of a bond, which interest rate would you use? Group of answer choices A. Stated rate B. Market rate C. Nominal rate D. Compound rate
Which of the following is considered the principal when figuring interest for a bond? Group of answer choices face of the bond effective interest rate life of bond none of these
The coupon rate of a bond is typically __________.a. fixed at the time of bond issuanceb.subject to change based on the federal funds ratec.zero in the case of zero - coupon bondsd. Both A and C
At a bond's maturity, the bond issuer pays the bondholder the par value of the bond. True or False True False
A bond that has only one payment, which occurs at maturity, defines which one of these types of bonds?
Refer to Chapter 10, page 567: Stated rate of interest versus the market rate of interest Required Indicate whether a bond will sell at a premium (P), discount (D), or face value (F) for each of the following conditions: ____ The stated rate of interest is higher than the market rate. ____ The market rate of interest is equal to the stated rate. ____ The market rate of interest is less than the stated rate. ____ The stated rate of interest is less than the market rate. ____ The market rate of interest is higher than the stated rate
Please answer both. This is part A and B
How do you calculate the price of a bond? It is: The sum of the present value of the face amount and the value of credit default swaps The sum of the future value of annuity of interest and the fair value of its inventory The sum of the present value of annuity of interest and the face amount of the bond The sum of the current value of the issuing corporation of accounts receivables None of the above.