85.
Refer to the information above. Employees’ annual “take-home-pay,” totals
approximately:
86.
Refer to the information above. Some of the payroll-related expenses incurred by Rockland
Corporation are mandated by law, rather than negotiated with employees. During the
current year, these mandated amounts increased Rockland’s payroll-related expenses by
approximately:
87.
In preparing an amortization table, it is necessary to include:
88.
Temple Corporation purchased a piece of real estate, paying $400,000 cash and financing
$700,000 of the purchase price with a 10-year, 15% installment note. The note calls for
equal monthly payments that will result in the debt being completely repaid by the end of
the tenth year. In this situation:
10–44
89.
When an installment note is structured as a “fully amortizing” loan with equal monthly
payments (such as a traditional mortgage):
On December 1, Year 1, Bradley Corporation incurs a 15-year $200,000 mortgage liability
in conjunction with the acquisition of an office building. This mortgage is payable in
monthly installments of $2,400, which include interest computed at the rate of 12% per
year. The first monthly payment is made on December 31, Year 1.
90.
Refer to the information above. Compute the total amount to be paid by Bradley over the
15-year life of the mortgage.
91.
Refer to the information above. How much of the first payment made on December 31,
Year 1, represents interest expense?
92.
Refer to the information above. The total liability related to this mortgage reported in
Bradley’s balance sheet at December 31, Year 1, is:
93.
Refer to the information above. Over the 15-year life of the mortgage, the total amount
Bradley will pay for interest charges is:
94.
Refer to the information above. The portion of the second monthly payment made on
January 31, Year 2, which represents repayment of principal is:
95.
When a company sells bonds between interest dates they will pay which of the following
at the first interest payment date?
96.
If a bond is issued at par and between interest dates:
97.
The term “junk bonds” describes bonds with:
98.
One advantage of issuing bonds instead of stock is that:
99.
Choose the statement that correctly summarizes the tax advantage of raising money by
issuing bonds instead of common stock:
100.
Suppose investors decided to sell their holdings of capital stock in order to purchase
outstanding bonds payable and as a result, the prices of bonds payable increased. What
would be the likely impact on market interest rates?
101.
Sinking funds usually appear on the balance sheet as:
102.
A company issues $50 million of bonds at par on January 1, 2015. The bonds pay 10%
interest semi-annually on 12/31 and 6/30 and mature in 20 years. The journal entry when
the bonds are sold is:
103.
Bonds which may be exchanged for a specified number of shares of capital stock are
called:
104.
Which of the following is
not
an accurate statement regarding the distinction between
debt and equity?
105.
When a corporation has a right to redeem bonds in advance of the maturity date, the bond
is considered a:
106.
A bond that is
not
secured is also known as:
107.
In relation to a bond issue, the role of the underwriter is to:
108.
Elm Corporation plans to invest $300 million to earn about 15% before income taxes. The
company is considering whether it should raise the $300 million by issuing 10% bonds
payable or capital stock. If the company issues the bonds, it will probably report:
10–56
109.
Which of the following does
not
affect the market price of an outstanding bond issue?
Fluctuations in the current market rate of interest.
The credit rating of the issuing corporation.
The price at which the bonds were originally issued.
On April 1, year 1, Cricket Corporation issues $60 million of 12%, 10-year bonds payable at
par. Interest on the bonds is payable semiannually each April 1 and October 1.
110.
Refer to the information above. The amount of cash paid to bondholders for interest during
Year 1, is:
111.
Refer to the information above. Interest expense on this bond issue reported in Cricket’s
Year 1, income statement is:
112.
Refer to the information above. The adjustment necessary at December 31, Year 1 (if any),
related to this bond issue involves:
113.
Refer to the information above. With respect to this bond issue, Cricket Corporation’s
balance sheet at December 31, Year 1, will include:
On April 1, Year 1, Greenway Corporation issues $20 million of 10%, 20-year bonds
payable at par. Interest on the bonds is payable semiannually each April 1 and October 1.
114.
Refer to the information above. The journal entry to record the first cash payment to
bondholders on October 1, year 1, will include:
115.
Refer to the information above. The adjusting entry (if any) required on December 31, Year
1, related to this bond issue involves:
116.
Refer to the information above. In Year 2, Greenway‘s income statement will report
interest expense arising from this bond issue of: