:A dicount on bonds payable .Occurs when a corporation issues bonds with a stated rate more than the market rate A .Occurs when a corporation issues bonds with a stated rate less than the market rate.B O .Is reported under the equity section on the balance sheet.C O .Is a contra-asset account.D
Q: Premium on Bonds Payable has a debit balance. O is a contra account. is deducted from bonds payable…
A: is considered to be a reduction in the cost of borrowing.Explanation:Premium on Bonds Payable refers…
Q: The sale of bonds is also referred a. Equity Finance b. Private Finance c. Debt Finance d.…
A: A firm can raise finance in two ways. They are referred to as debt finance and equity finance.
Q: Which of the following are differences between a bond and a common stock? (Select all that…
A: Debt markets are markets where you contribute within the institutions or trade substances by the…
Q: The Discount on Bonds Payable account is: Multiple Choice O O O O O An expense. A liability. A…
A: An expense account is not carried forward and closed in the income statement. But Discount on Bonds…
Q: The journal entry to record the issuance of bonds at a premium consists of a debit to Cash, a debit…
A: Issue of bonds is one of source of finance being used in business. Under this, long term or short…
Q: On an income distribution schedule, any gain or loss resulting from intercompany bonds is charged to…
A: Bonds are tradable assets issued by business entities as debt instruments. The holders of the bonds…
Q: Premium on Bonds Payable is a(n) a. valuation account b. contra account c. accumulation account d.…
A: Premium on bonds payable : Premium on bonds payable arises when bonds payable are issued for an…
Q: Bonds for which the owners' names are not registered with the ISSUING corporation are called Select…
A: Bearer Bond: A bearer bond is a fixed-income asset in which the holder, or bearer, owns the security…
Q: How shall the equity component of a bonds payable issued with share warrants be valued? a.)issue…
A: A bond is a fixed pay instrument issued to represents to an advance made by a financial specialist…
Q: Bond that does not coincide with the reporting period On April 1, 2023, ACT Company issued a 3-year,…
A: The liabilities are classified as current liabilities and non-current (or long-term) liabilities.…
Q: Gains on the redemption of bonds are reported in the Other Revenue section of the income statement.…
A: Introduction: Income statement is considered as one of the key financial statements that shows a…
Q: Which types of bonds are most liquid? Corporate Bonds O Municipal Bonds Treasury Bonds O Agency…
A: A bond is a financial instrument that represents a loan made by an investor to a borrower, which can…
Q: The largest type of municple bonds outstanding is: A. revenue bonds. B. Industrial development…
A: Municipal Bonds:Municipal bonds are those bonds which are issued by local or state government of a…
Q: The following are examples of debt financing EXCEPT: a. Selling an ownership stake in the company…
A: Bonds represent the amount which is raised by the firm where repayment is made after a certain time…
Q: Serial bonds are a. Bonds backed by collateral.b. Bonds that mature in installments.c. Bonds the…
A: Bonds: These are the corporate debt units that a company issues and securitizes as tradeable assets.…
Q: If bonds are issued between interest dates, the entry on the bocC of the issuing corporation could…
A: Interest is calculated on face value of a bond.
Q: 1, The establishment of a bond sinking fund is required at all times to settle bond liability. A.…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: 4. The gain or loss on the retirement of bonds prior to maturity should be * a. recognized in income…
A: Gain or loss on redemption of debenture prior to its maturity is immediately recognised in profit…
Q: Bond premium should be reported in the statement of financial position A. along with other premium…
A: A premium on bonds means investors are satisfied with a rate of interest lower than the rate stated…
Q: Which of the following statements is true regarding secured and unsecured bonds? O Secured bonds are…
A: Solution: There are two types of bonds: 1. Secured bonds - These bonds are secured against specific…
Q: Bailey Enterprises purchased bonds on the open market at a discount. The company intends to hold the…
A: Amortized cost accounting involves recording the initial cost of the bonds and then adjusting the…
Q: Corporate bonds that can be exchanged for shares of the corporation's common stock if certain…
A: Reason:A convertible bond is a hybrid type of security that provided fixed interest income along…
Q: GAAP requires investments in bonds classified as trading securities to be reported at their:
A:
Q: The sale of bonds is also referred as: a. Public Finance b. Debt Finance c. Equity Finance d.…
A: The Bonds is a type of a loan. When a company, Government or muncipal corporation is in need of…
Q: Bonds which permit the bondholder to convert the bonds into shares of stock are called: Select one:…
A: AS THE NAME SUGGESTS , THE CONVERTIBLE BONDS ALLOW THE OWNER THE OPTION TO CONVERT BONDS INTO A…
Q: Interest revenue on bonds is reported Question 24 options: as part of other income as part of…
A: The bonds are the financial instruments for the business that are issued to raise money from the…
Q: When a company exercises its call provision on bonds, the company pays the book value of the bonds…
A: Call provision on the bond is the option held by the issuer for redeeming back the bonds if in case…
Q: 1 a. Describe intercompany bonds. b. Explain how to eliminate intercompany bonds on the company’s…
A: Eliminating entries: In consolidation of financial statements, all account balances arising from…
Q: Corporate bonds that can be exchanged for shares of the corporation’s common stock ifcertain…
A: Corporate bond: It can be defined as a debt security, usually issued by the public or private…
Q: Which of the following statements regarding bonds is true? Group of answer choices a. Bonds are…
A: Bonds are common fixed income instruments issued by an organization to the investor.
Q: When bonds are acquired between interest payment dates, the price paid for the bond is: a.…
A: The bonds are considered as long-term liabilities for the organizations and interest accrued are…
Q: O c. callable bom O d. debenture E
A: Debenture: A debenture is a written document or certificate acknowledging borrowing by the company.…
Q: What type of account is Premium on Bonds Payable? What is its normal balance? Is it added to or…
A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various…
Q: On the balance sheet, the account Premium on Bonds Payable is: Select one: a. Added to Bonds…
A: When the rate of interest offered on Bonds issued by a company is more than the market rate of…
Q: The following data were taken from the balance sheet accounts of Sage Corporation on December 31,…
A: The distribution of the company’s profit to the shareholders is termed as dividends. There are…
Q: What type of account is Discount on Bonds Payable? What is its normal balance? Is it added to or…
A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various…
Q: The journal entry a company makes for the payment of interest, interest expense, and amortization of…
A: Journal entries are passed following the golden rules of accounting. Debit all assets and expenses…
Q: Under IFRS, how are convertible debt recorded? Convertible debt is separated into equity component…
A: Solution: Under IFRS, convertible debt are recorded as "Convertible debt is separated into equity…
Q: the carrying amount of bonds redeemed is more than the redemption price, the difference is recorded…
A: Bonds are financial instruments or debt securities that are issued by corporations, governments, and…
Q: The carrying value of Bonds Payable equalsa. Bonds Payable plus Discount on Bonds Payable.b. Bonds…
A: Answer: Option b
Q: When the conversion of bonds payable to common stock is recorded under the market value method and…
A: Journal entry will be - bonds payable debit…
Q: he journal entry a company makes for the is a. debit Cash and Discount on Bonds Payable, cred Ob.…
A: When the contract rate is less than the Market rate , the bonds are issued at discount.
Q: Bonds that are issued on the general creditworthiness of the company are: Bonds that are issued on…
A: Bond is a borrowing security that is issued by the company to raise funds from the market by making…
Q: Collateralized Debt Obligations (CDO’s) are pools of__ a) all tranches of MBS b) the mezzanine and…
A: Collaterized Debt obligations are very complex financial products that are secured by group of…
Q: When an entity issued bonds payable with detachable share warrants, how will share premium be…
A: When an entity issued bonds payable with detachable share warrants, how will share premium be…
Q: 2. Bonds are sold at a premium if the a.market rate of interest was more than the stated rate at…
A: Bonds payable are one of the sources of finance and are shown as liability. If the interest rate is…
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- 2. Characteristics of bonds A. To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is essential. For example: • A bond’s is generally $1,000 and represents the amount borrowed from the bond’s first purchaser. • A bond issuer is said to be in if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue’s restrictive covenants. • The contract that describes the terms of a borrowing arrangement between a firm that sells a bond issue and the investors who purchase the bonds is called . • A bond’s gives the issuer the right to call, or redeem, a bond at specific times and under specific conditions. Suppose you read an article about the Golden Gate Bridge and Highway District bonds. It includes the following information: Bridge Bonds Series A Dated 7-15-2005 4.375%…(I) Capital market securities fall into two categories: bonds and stocks. (II) Long-termbonds include government bonds and long-term notes, municipal bonds, and corporate bonds.a) (I) is true, (II) false.b) (I) is false, (II) true.c) Both are true.d) Both are false1. Which of the following statements regarding bonds payable is true? a.The entire principal amount of most bonds matures on a single date. b.When an issuing company's bonds are traded in the secondary market, the company will receive part of the proceeds when the bonds are sold from the first purchaser to the second purchaser. c.A debenture bond is backed by specific assets of the issuing company. d.Generally, bonds are issued in denominations of $100.
- Listed below are terms and definitions assoclated with bonds. Select the bond term that matches with the definitlon. Definitions Terms Allows the issuer to pay off the bonds early at a fixed price. Matures in installments. Secured only by the "full faith and credit" of the issuing corporation. Allows the investor to transfer each bond into shares of common stock. Money set aside to pay debts as they come due. a. b. C. d. е. f. Matures on a single date. 9. Supported by specific assets pledged as collateral by the issuer. h. Includes underwriting, legal, accounting, registration, and printing fees.Term bonds are a.bonds that give the issuing corporation the option of calling the bonds for redemption before the maturity date. b.bonds that give the holder the option of exchanging the bonds for capital stock of the corporation. c.bonds issued in a series so that a specified amount of the bonds matures each year. d.bonds that all have the same maturity date.The balance in Unamortized Discount on Bonds Payable should be Oa. reported separately in the Current Liabilities section of the balance sheef Ob. added to the face amount of the related bonds payable on the balance sheet. O C. reported in the Paid-In Capital section of the balance sheet. Od. reported on the balance sheet as a deduction from the face amount of the related bonds payable.
- 1. Bonds maturing on a single date are called A. callable bonds B. debenture bonds C. serial bonds D. term bonds 2. Bonds payable are initially recognized at A. issue price minus transaction costs incurred by the entity. B. issue price C. issue price plus accrued interest D. face value 3. For accounting purposes, interest expense recognized on bonds payable should be based on the A. effective interest rate, considering the issue price and the transaction costs. B. nominal interest rate. C. rate stated on the face of the bonds. D. market rate of interest on the reporting date. 4. Bonds bearing an interest rate of 8% were issued above their face value. This implies that the market rate of interest A. at date of issue is equal to 8%. B. at date of issue is higher than 8%. C. at date of issue is lower than 8% D. at the reporting date is higher than 8%. 5. How should the issue price of the bonds with non-detachable share warrants be accounted for? A. The proceeds are fully assigned to the…Johansen Company issued a bond at a discount. Which of the following shows how the issuance of the bonds affects the financial statements? Balance Sheet A. C. D. Assets = Liabilities + Multiple Choice O O OO Option A Option C Option B Option D Stockholders' Equity n/a n/a n/a Revenue n/a n/a n/a n/a Income Statement Expense + n/a + n/a = Net Income Statement of Cash Flows +OA +FA +FA +OA n/a n/aT or F - Zero-interest bonds sell at a significant discount that provides an investor with a total interest payoff at maturity. -Bond issuance costs must be reported separately as deferred charges and charged to expense over the life of the bond issue. -According to PAS 37, restructuring is a program that is planned and controlled by management, and materially changes either the scope of a business undertaken by an entity; or the manner in which that business is conducted -Provisions are presented in the statement of financial position as part of the line item “Trade and other payables.”
- When corporations issue bonds, there are two distinct obligations. What are those obligations? What do the following terms mean in regard to corporations issuing bonds: convertible, callable, and debenture?6. Which of the following is true of secondary securities? a) They include equities, bonds, and other debt claimsb) They are backed by the real assets of corporations issuing them c) They are securities that back primary securitiesd) They are securities issued by FIsThe Discount on Bonds Payable account is O A contra expense O A liability O An expense O A contra liability