Question 21If an issuer retires a debt issue before its maturity, the amount paid to do so is called the:A) sinking fund amount.Bthe discount.Ⓒ par or face amount.Damortized payoff.Ecall price.

The incorrect answers are: Sinking fund amount: This is the portion of the debt set aside by the…

Answered: Question 21 If an issuer retires a debt…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 11MC: When a bond sells at a discount, the carrying value ________ after each amortization entry. A....

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#51 When an investor's accounting period ends on a date that does not coincide with an interest receipt date for bonds held as an investment, the investor must Question 51 options: a make an adjusting entry to debit Interest Receivable and to credit Interest Revenue for the amount of interest accrued since the last interest receipt date. b make an adjusting entry to debit Interest Receivable and to credit Interest Revenue for the total amount of interest to be received at the next interest receipt date. c notify the issuer and request that a special payment be made for the appropriate portion of the interest period. d do nothing special and ignore the fact that the accounting period does not coincide with the bond's interest period.
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3. A pension fund has the following liability obligations to its pensioners: Market Value $4.25 Bln $5.75 Bln $3.50 Bln Liability A B C It has $13.50 Bln available cash to invest in the following bonds: Bond Ꭰ E Modified Duration Modified Duration 5.25 11.86 6.25 8.05 7.55 Set up the system of equations to determine how much of its available cash should the pension fund invest in the two bonds to ensure that the market value duration of assets will match the market value duration of liabilities.

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Question 21 If an issuer retires a debt issue before its maturity, the amount paid to do so is called the: A) sinking fund amount. B the discount. Ⓒ par or face amount. D amortized payoff. E call price.