bonds is incorrect
Q: A callable bond: Select one: a. can be paid off early at either the issuer's or the bondholder's…
A: Organizations issue bonds for financing their operation and pay the interest on these bonds annually…
Q: Bonds that pay no interest unless the issuing company is profitable are called Select one: O a.…
A: Wrong answer B) Collateral trust bond: Collateral means additional security. Thus in collateral…
Q: Which of the following is the worst measure of the cost of debt? Estimating Interest Rate based on…
A: The cost of debt is the effective return that a company pays for its debt to its debtholders. It is…
Q: Interest-rate risk results from: a. Bond prices being fixed over the life of the bond b. Inflation…
A: Interest rate risk refers to the sensitivity of the bond prices to the interest rate changes. There…
Q: what causes the bond liability for a bond issued at a premium to decrease each interest payment…
A: Bond premium is the premium which has been received by the company who has issued the bond by way of…
Q: All of the following are differences between IFRS and GAAP in accounting for liabilities except: (a)…
A: Generally Accepted Accounting Principles (GAAP): Generally Accepted Accounting Principles are the…
Q: 8. Who is the party in a bond contract who has the obligation to pay during maturity dates? a.…
A: Bond is a debt instrument issued by company or government. The holder of bonds is the lender or…
Q: Fixed-income securities consist of debt instruments and preferred stock. Bonds are debt securities…
A: What are treasury bonds? Treasury bonds can be defined as government debt securities that are issued…
Q: Companies pay rating agencies to rate their bonds, and the costs can be substantial. However,…
A: As you have asked multiple questions, we will solve the first question as per policy. Request you to…
Q: 1) Were the bonds in the entry on Dec 31. of year 2 redeemed at Maturity? 2) You suspect there is…
A: Journal: Recording of a business transactions in a chronological order.
Q: Commercial loan agreements should contain which of the following: a. representations b. fees and…
A: A commercial loan agreement is an agreement between the borrower and the lender. The lender provides…
Q: Which of the following types of debt securities protect investors against interest rate risk? a.…
A: An extendable bond is a type of debt security that includes an option Which allows the bondholder…
Q: How are investors of zero-coupon bonds compensated for making such an investment? A. Such bonds…
A: Bond are debt instruments issued by companies. Zero coupon bonds, as the name indicates, do not pay…
Q: The effective rate of interest on bonds is the interest rate specified on the bond certificate. is…
A: Introduction: A bond is a form of debt that the bond issuer owes to the bondholders. The common…
Q: A debit to Discount on Bonds Payable would most likely be possible on which of the situations?…
A: The bonds are issued at discount when market rate is higher than the coupon rate of interest.
Q: Which of the following statements is TRUE? a. When the stated rate of interest exceeds the…
A: The stated rate is not considered the compounding factor of the time value of money. The effective…
Q: Select the description that best fits each term or phrase. A. Records and tracks the bondholders’…
A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…
Q: The definitions of default events are fairly standard, but what really constitutes a default? a. The…
A: Default refers to the failure to comply with the agreed terms of the agreement that the involved…
Q: Bonds which are collateralized by specific assets in the event the borrowing company defaults on…
A: Bonds are a form of liability for the business. These can be issued for short term or long term.…
Q: Why are bonds sometimes issued at a discount?
A: The correct answer is: (A) The stated rate of interest is lower than the rate being paid on…
Q: If the market rate is higher than the stated rate, the bonds will sell for less than face value and…
A: Solution Concept If the market rate is higher than the stated rate, the bonds will sell for less…
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: Which of the following about bonds is false? OA Higher bond rating indicates higher probability of…
A: A bond is a debt instrument used by companies to raise capital from their investors. The investor…
Q: Which of the following is not generally correct about recording a sale of a debt security before its…
A: The other options are generally correct - A discount on the debt security is typically amortized to…
Q: no Have All Questions been Answered? There are Three Parts to this problem (A, B, and C). Part A.…
A: Details are provided below.Explanation:The market rate of interest is greater than the stated rate…
Q: B. TRUE OR FALSE. Use the separate answer sheet. 1. If the effective (market) interest rate is less…
A: The objective of the question is to determine the truthfulness of each statement related to various…
Q: Bonds are a common long-term debt instrument. They are interesting because they are issued with a…
A: 1. If the bond is selling at a premium is that the value of a bond is more than its face value.…
Q: When bonds are redeemed before maturity, how is the gain or loss onredemption determined? Why does…
A: A bond is a repaired instrument that represents a loan from an investor to a borrower (typically…
Q: mortgage bond, a debenture, or a subordinated debenture
A: Bond refers to the investment securities in which an investor lends money to the government in…
Q: 6. Which of the following is true of demand bonds? a. They give the issuer the right to call the…
A: Demand bonds are long terms bond with "put" provision for bond holders. This means that bond holders…
Q: When the total cost of borrowing is less than the bond interest paid, Select answer from the options…
A: A bond may be issued at face value, at a discount, or at a premium. The bond is issued at face value…
Q: To calculate a gain or loss on redemption of a bond, you compare a. The market interest rate to the…
A: Bonds are considered a financial instrument used to raise finance for the organization. It is also…
Q: When determining the amount of interest to be paid on a bond, which of the following information is…
A: The correct answer is: (D) The selling price of the bonds The selling price of the bonds is not…
Q: Which of the following is true of a discount on bonds payable? it is a contra-stockholders’…
A: Interest paid on bonds consists of two components: Interest expense and Discount on bonds payable…
Q: Analyze the truth of this statement: Unlike bonds each installment note payment includes payment of…
A: Not payable can be short term Not payable or a longterm Not payable
Q: Interest-rate risk results from: Answer a. Bond prices being fixed over the life of the bond b.…
A: A bond is a type of debt security in which the issuer of a bond owes the holder debt and is obliged…
Q: For a standard U.S. Treasury bond, when are the following characteristics of the bond determined?…
A: The question is asking about the timing of when various characteristics of a standard corporate bond…
Q: Amortizing the discount on bonds payablea. increases the recorded amount of interest expense.b.…
A:
Q: Under what situation might a bond discount arise when issuing bonds? Select one: a. The coupon rate…
A: The correct answer is:b. The effective or yield rate is less than the coupon rate.When issuing…
Q: Which of the following statements is false? A. Asset-backed securities (ABS) may be backed by…
A: A financial asset-backed securities (ABS) is a form of financial investment that is backed by a pool…
Q: A. To be effective issuing and investing in bonds, knowledge of their terminology, characteristics,…
A: A. Face value Face value is the amount at which bonds are recorded in the books of accounts.…
Q: Which of the following is FALSE regarding bonds? ) Long term bonds have greater interest rate risk…
A: A bond is an instrument that represents the loan that is made by the investor to the company and…
Q: Fixed-income securities consist of debt instruments and preferred stock. Bonds are debt securities…
A: As per bartleby guidelines, Since you have posted multiple questions, only first question will be…
Q: A. must equal the effective interest rate. B. is greater than the effective interest rate when…
A: Introduction : In simple words, When bonds are offered at a premiums, the contract interests rate is…
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- 1. If bonds are sold at a discount and the straight-line method of amortization is used, interest expense in earlier years will: (A) Exceed what is would have been had the effective interest rate method of amortization been used. (B) Be less than what it would have been had the effective interest rate method of amortization been used. (C) Be the same as it would have been had the effective interest rate method of amortization been used. (D) None of the above.To be effective issuing and investing in bonds, knowledge of their terminology, characteristics, and features is essential. For example: • A bond’s refers to the interest payment or payments paid by a bond. • 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% Due 7-15-2055 @100.00 What is the issuing date of this bond? 7-15-2005 7-15-2055…Which one of the following is the reason that bonds may sell at a discount or premium? Select one: a. Market conditions caused the coupon rate of interest to change between the time the bond agreement was written and the date the bonds were actually issued to investors b. The bond issuer failed to consider the market yield rate when the bond agreement was created c. The bond issuer adjusted the coupon rate to match that of other bond issues d. The market yield rate fluctuated between the time the bond agreement was written and the date the bonds were actually issued to investors
- Which of the following are characteristics of consumer closed credit (installment debt)? 1. generally the loan is larger than what is available with revolving credit 2. flexibility in the amount and timing of the debt repayment 3. the loan repayment is often fully amortized 4. the interest rate on a collateralized installment loan is typically lower than the interest rate on unsecured revolving credit 5. if the loan is paid before the grace period, then no interest applies 1 and 2 O 2, 4 and 5 O 1, 3 and 4 O 3 and 4In U.S. GAAP, bond issue costs are considered ________. Group of answer choices a period cost a cost of borrowing that reduces the effective interest expense an initial cost that is expensed when the bonds are issued an element in determining the carrying value of the bonds outstanding18. Which of the following statements are true?Statement I. An interest rate reflects the rate of return that a creditor receives when lending money, or the rate that a borrower pays when borrowing money. Interest rates change over time, so does the rate earned by creditors who provide loans or the rate paid by borrowers who obtain loans. Statement II. Interest rate movements have a direct influence on the market values of debt securities, such as money market securities, bonds, and mortgages. Statement III. Interest rate movements have an indirect influence on equity security values because they can affect the return by investors who invest in equity securities. Statement IV. Since interest rates have an influence on securities, participants in financial markets attempt to anticipate interest rate movements when restructuring their investment or loan positions. a. I,II,III b. I,II,IV c. I,III,IV d. I,II,III,IV
- 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 rateCan I use the yield to maturity (YTM) on a bond issued by the company as the cost of debt? A Yes, you can use the YTM B No, you cannot use the YTM C Only if the bond is liquid and has not special feature embedded in it D There is not enough information to answer this problemTrue/FalseIndicate whether the statement is true or false. 1. A liability is recorded as a result of past events or transactions. 2. If the stated interest rate for a bond issue exceeds the market interest rate, the bonds will sell at a discount. 3. Convertible bonds can be exchanged for another form of security, such as common stock, at the option of the issuer. 4. If a lease transfers ownership of the property to the lessee by the end of the lease term, it will be classified as a capital lease by the lessee. 5. The acquisition cost of property includes only the original purchase price or equivalent value. 6. When property is acquired by issuing securities, the transaction is always recorded at the fair market value of the asset acquired. 7. Depreciation is the systematic and rational allocation of asset cost over the periods benefitted by the use of the asset. 8. The…
- How are the bonds issued, what is the appropriate journal entry? Provide example for issuing bonds. How do we determine the present value of a bond when market rate differs from its contract rate? How do we record the interest payment (provide examples for both premium and discount amortization), using the effective interest method? What is the difference between the effective interest method and the straight line method when amortizing either a discount or a premium? Cite and give credit to the author that you are citing.TRUE OR FALSE: An implicit or imputed rate of interest must be used when long-term notes are issued at a stated rate of interest that is materially different from the market rate of interest.ll of the following are differences between IFRS and GAAP in accounting for liabilities except: a. When a bond is issued at a discount, GAAP records the discount in a separate contra liability account. IFRS records the bond net of the discount. b. Under IFRS, bond issuance costs reduce the carrying value of the debt. Under GAAP, these costs are recorded as an asset and amortized to expense over the terms of the bond. c. GAAP, but not IFRS, uses the term “troubled-debt restructurings.” d. GAAP, but not IFRS, uses the term “provisions” for contingent liabilities which are accrued