A legal document that indicates the name of the issuer, the face value of the bo

Question

A legal document that indicates the name of the issuer, the face value of the bond and such other data is called
A) trading on the equity.
B) convertible bond.
C) a bond debenture.
D) a bond certificate.
15.
Bonds Payable has a balance of $1,000,000 and Premium on Bonds Payable has a balance of $7,000. If the issuing corporation redeems the bonds at 101, what is the amount of gain or loss on redemption?
A) $3,000 loss
B) $3,000 gain
C) $7,000 loss
D) $7,000 gain
16.
Numbers of times interest charges earned is computed as
A) Income before income taxes plus Interest Expense divided by Interest Expense
B) Income before income taxes less Interest Expense divided by Interest Expense
C) Income before income taxes divided by Interest Expense
D) Income before income taxes plus Interest Expense divided by Interest Revenue
17.
When the effective-interest method is used, the amortization of the bond premium
A) increases interest expense each period
B) decreases interest expense each period
C) increases interest expense in some periods and decreases interest expense in other periods
D) has no effect on the interest expense in any period

Explanation / Answer

14 A legal document that indicates the name of the issuer, the face value of the bond and such other data is called a bond certificate. 15 Loss on redemption = (1000000*1.01)-(1000000+7000) = $3000 loss 16 Numbers of times interest charges earned is computed as Income before income taxes plus Interest Expense divided by Interest Expense 17 The amortization of the bond premium decreases interest expense each period

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