55.
Camp Elim obtains a $125,000, 6%, five-year loan for a new camp bus on January 1, 2018.
If the monthly payment is $2,416.60, by how much will the carrying value decrease when
the first payment is made on January 31, 2018?
56.
Which of the following leases is just like a rental?
57.
Which of the following leases is essentially the purchase of an asset with debt financing?
58.
Which of the following is
not
a reason why some companies lease rather than buy?
59.
Which of the following is a reason why some companies lease rather than buy?
60.
Under an operating lease, leasing improves the balance sheet by reducing:
61.
The advantages of obtaining long-term funds by issuing bonds, rather than issuing
additional common stock, include which of the following?
62.
The advantages of obtaining long-term funds by issuing bonds, rather than issuing
additional common stock, include which of the following?
63.
Which of the following definitions describes a term bond?
64.
Which of the following definitions describes a serial bond?
65.
Which of the following definitions describes a secured bond?
66.
Term bonds are:
67.
Serial bonds are:
68.
Bonds can be secured or unsecured. Likewise, bonds can be term or serial bonds. Which is
more common?
69.
A home loan with fixed monthly payments and the house as collateral most closely
represents which of the following bond characteristics?
70.
Which of the following is
not
true regarding callable bonds?
71.
Convertible bonds:
72.
The price of a bond is equal to:
73.
A bond issue with a face amount of $500,000 bears interest at the rate of 10%. The current
market rate of interest is also 10%. These bonds will sell at a price that is:
74.
A bond issue with a face amount of $500,000 bears interest at the rate of 7%. The current
market rate of interest is 8%. These bonds will sell at a price that is:
75.
A bond issue with a face amount of $500,000 bears interest at the rate of 7%. The current
market rate of interest is 6%. These bonds will sell at a price that is:
76.
Ordinarily, the proceeds from the sale of a bond issue will be equal to:
77.
A $500,000 bond issue sold for $510,000. Therefore, the bonds:
78.
A $500,000 bond issue sold for $490,000. Therefore, the bonds:
79.
For a bond issue that sells for more than the bond face amount, the stated interest rate is:
80.
For a bond issue that sells for less than the bond face amount, the stated interest rate is:
81.
Bond X and Bond Y are both issued by the same company. Each of the bonds has a face
value of $100,000 and each matures in 10 years. Bond X pays 8% interest while Bond Y
pays 7% interest. The current market rate of interest is 7%. Which of the following is
correct?
82.
Bond X and Bond Y are both issued by the same company. Each of the bonds has a face
value of $100,000 and each matures in 10 years. Bond X pays 8% interest while Bond Y
pays 9% interest. The current market rate of interest is 8%. Which of the following is
correct?
83.
Seaside issues a bond with a stated interest rate of 10%, face value of $50,000, and due in
5 years. Interest payments are made semi-annually. The market rate for this type of bond
is 12%. What is the issue price of the bond?
84.
Seaside issues a bond with a stated interest rate of 10%, face value of $50,000, and due in
5 years. Interest payments are made semi-annually. The market rate for this type of bond
is 8%. What is the issue price of the bond? (Use
http://lectures.mhhe.com/connect/1259307956/Table2.pdf and
http://lectures.mhhe.com/connect/1259307956/Table4.pdf)
85.
Given the information below, which bond(s) will be issued at a discount?
Bond 1
Bond 2
Bond 3
Bond 4
Stated Rate of
Return
5%
7%
12%
10%
Market Rate of
Return
7%
8%
12%
9%
86.
Given the information below, which bond(s) will be issued at a premium?
Bond 1
Bond 2
Bond 3
Bond 4
Stated Rate
of Return
5%
10%
7%
10%
Market Rate
of Return
7%
8%
7%
9%
87.
Given the information below, which bond(s) will be issued at a discount?
Bond 1
Bond 2
Bond 3
Bond 4
Stated Rate of
Return
10%
8%
12%
12%
Market Rate of
Return
12%
8%
15%
10%
88.
Given the information below, which bond(s) will be issued at a premium?
Bond 1
Bond 2
Bond 3
Bond 4
Stated Rate
of Return
7%
12%
10%
8%
Market Rate
of Return
8%
10%
10%
9%
89.
The rate quoted in the bond contract used to calculate the cash payments for interest is
called the:
90.
The true interest rate used by investors to value a bond is called the:
91.
The rate quoted on the bond contract used to calculate the cash payments for interest is
called the:
92.
Which of the following is true for bonds issued at a discount?
93.
Which of the following is true for bonds issued at a premium?
94.
Samson Enterprises issued a ten-year, $20 million bond with a 10% interest rate for
$19,500,000. The entry to record the bond issuance would have what effect on the
financial statements?
95.
Megginson, Inc. issued a five-year corporate bond of $300,000 with a 5% interest rate for
$290,000. What effect would the bond issuance have on Megginson, Inc.’s accounting
equation?
96.
The cash interest payment each period is calculated as the: