Listed below are terms and definitions assoclated with bonds. Select the bond term that matches with the definitlon.DefinitionsTermsAllows 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.

a. Allows the issuer to pay off the bonds early at a fixed price --Callable Bond, Whenever issuer…

Answered: Allows the issuer to pay off the bonds…

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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Access the FASB Accounting Standards Codification at the FASB website ( www.fasb.org ). Determine the specific citation for accounting for each of the following items: 1. Disclosure requirements for maturities of long-term debt. 2. How to estimate the value of a note when a note having no ready market and no interest rate is exchanged for a noncash asset without a readily available fair value. 3. When the straight-line method can be used as an alternative to the interest method of determining interest.
A $2,600 credit balance in the Premium on Bonds Payable account represents which of the following? Select one: a. An overpayment for a bond purchase b. An underpayment for a bond purchase c. The current amount of amortization expense d. The unamortized amount of premium earned on a bond issue
b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. Bonds Payable Cash Discount on Bonds Payable Interest Expense Interest Receivable 3. Determine the total interest expense for Year 1. Round to the nearest dollar. 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? 5. Compute the price of $23,854,460 received for the bonds by using Present value at compound interest, and Present value of an annuity. Round to the nearest dollar. Your total may vary slightly from the price given due to rounding differences. Present value of the face amount Present value of the semiannual interest payments Price received for the bonds
Amortizing the discount on bonds payablea. increases the recorded amount of interest expense.b. reduces the semiannual cash payment for interest.c. reduces the carrying value of the bond liability.d. is necessary only if the bonds were issued at more than face value
Enumerate the following; 32. Provides for recognition of an equal amount of premium or discount amortization each period. 33. Bonds that mature in one lump sum at a specified future date. 34. Bonds that provide for conversion into some other security at the option of the stockholder. 35. Bonds that mature in a series of installments at future dates. 36. The difference between the face value and the sales price when bonds are sold below their face value. 37. Bonds for which assets are pledged to guarantee repayment. 38. Obligations that are not expected to be paid in cash within one year or the normal operating cycle. 39. Bonds that do not bear interest but instead are sold at significant discounts providing the investor with a total interest payoff at maturity. 40. Costs incurred by the issuer for legal services, printing and engraving, taxes, and underwriting in connection with the sale of a…
Statement 1: Bond issuers can take additional loans against the properties that were considered as collaterals for the bonds. Statement 2: Bond issuers can impose the taxes paid for registering the bonds against on the interest and principal claims of the bondholders. Statement 3: Bond issuers can prioritize other claims of other creditors over the bondholders in cases of bankruptcy. Statement 4: Bond issuers can pay dividends of shareholders even though the bondholders were not yet paid so long as the board of directors have decided on it. Statement 5: Bond issuers can take additional loans that would potentially compromise the ability of the issuer to keep its promise so long as other creditors permit it. a.All statements are true b.Statements 1, 2 and 4 are true c.Statements 2, 3 and 5 are trued.Statements 2, 4 and 5 are true e.Statements 3, 4 and 5 are true f. All statements are false
Identify the following as either an advantage (A) or a disadvantage (D) of bond financing for a company. Bonds require payment of periodic interest.
46. Help me selecting the right answer. Thank you
Analyse the process of securitisation including the construction and use of mortgage backed securities and collateralised debt obligations. There is a need for a practical example. The maximum number of words is 1200. The minimum number of words is 800.
:A dicount on bonds payable .Occurs when a corporation issues bonds with a stated rate more than the market rate A O .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 .Is a contra-asset account.D
Mecca Energy Corp. issued a convertible bond on 1 August 20X9. The 10-year, 5% $16,000,000 bond pays interest semi-annually each 31 July and 31 January. At maturity, each $1,000 bond is convertible into 120 common shares. The bond was issued for $16,640,000. Market interest rates were approximately 6%. PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Provide the journal entry to record the initial issuance of the bond. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your time value to 5 decimal places and your final answers to the nearest whole dollar.) View transaction list Journal entry worksheet 1 Record the entry for issuance of bonds. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit
From page 9-3 of the VLN, what are the cash flows from a bond that must be present valued back to today? Group of answer choices A. The face amount only B. The interest payments only C. The issue price only D. The face amount and interest payments

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