6) If $1,002,000 of 10% bonds are issued at 102 1/2, what is the amount of cash

ID: 2432713 • Letter: 6

Question

6) If $1,002,000 of 10% bonds are issued at 102 1/2, what is the amount of cash received from the sale?

Select the correct answer.

a) $1,102,200

b) $1,027,050

c) $751,500

d) $1,002,000

7)If $587,000 of 10% bonds are issued at 96, what is the amount of cash received from the sale?

Select the correct answer.

a) $528,300

b) $563,520

c) $587,000

d) $645,700

13) Stockholders' equity

a) includes paid-in capital and liabilities.

b) is shown on the income statement.

c) includes retained earnings and paid-in capital.

d) is usually equal to cash on hand.

15) The par value per share of common stock represents the

a) minimum amount the stockholder will receive when the corporation is liquidated.

b) dollar amount assigned to each share.

c) minimum selling price of the stock established by the articles of incorporation.

d) amount of dividends per share to be received each year.

Answer 6.

Face Value of Bond = $1,002,000
Issue Price = 102.50%

Proceed from Issue = $1,002,000 * 102.50%
Proceed from Issue = $1,027,050

Answer 7.

Face Value of Bond = $587,000
Issue Price = 96%

Proceed from Issue = $587,000 * 96%
Proceed from Issue = $563,520

Answer 13.

Stockholders’ Equity includes retained earnings and paid-in capital.

Answer 15.

The par value per share of common stock represents the dollar amount assigned to each share.

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