Chapter 10, Problem 10.2DIE

State whether each of the following statements is true or false.

___________1. Convertible bonds are also known as callable bonds.

___________2. The market rate is the rate investors demand for loaning funds.

___________3 Semiannual interest payments on bonds are equal 10 the face value times the stated rate times 6/12.

___________4. The present value of a bond is the value at which it should sell in the market.

DO IT! 10-3a Smiley Corporation issues $300,000 of bonds for $315,000. (a) Prepare the journal entry to record the issuance of the bonds, and (b) show how the bonds would be reported on the balance sheet al the date of issuance.