7. issues S600000 of 1 1%. I 5-year bonds at a price of 102%. The straight line

Question

7. issues S600000 of 1 1%. I 5-year bonds at a price of 102%. The straight line OnJanuary 1, 2018,Jacob expense for the life is used to amorntine any bond discount or premium. What is the total interest of these bonds? $66,000 b. 5978,000 e. $1,002,000 d. $990,000 How would the balance in Discount on Bonds Payable n a company's December 31, 2017 Balance Sheet? 8 that is applicable to bonds due in 2023 be reported a As a deduction from the Bonds Payable account under long-term liabilities b. As an addition to the Bonds Payable c. As a deduction from the Bonds Payable account under current liabilities d. As a contra-equity account, reducing Total Stockholders' Equity account under long-term liabilities 9. The journal entry a corporation would make to record paying a bond at maturity would: a debit Cash, credit Bonds Payable and Interest Expense. b. debit Bonds Payable, credit Cash. c. debit Interest Expense, credit Cash. d. debit Interest Expense and Bonds Payable, credit Cash. In addition, you would need to remove any unamortized discount or premium 10. The right of common shareholders to protect their proportionate interest in a corporation by having the first opportunity to buy additional shares of common stock issued by the corporation is called a a. preemptive right b. proxy right c. voting right d. liquidation right 11. The total amount of stock that a corporation's charter allows it to issue is referred to as: a. issued stock b. authorized stock c. outstanding stock d. treasury stock 12. Which of the following is a characteristic of a corporation? a. A corporation cannot own property in its name. b. The transfer of ownership in a corporation is often limited by provisions in the corporate charter. The financial loss that a stockholder may suffer is limited to the amount invested by the stockholder d. c. The corporate Board of Directors manages the day-to-day operations of the corporation. 13. Par value of a stock refers to the: a. issue price of the stock b. value assigned to a share of stock by the corporate charter c. maximum selling price of the stock d. market value of the stock on the date of the financial statements 14. Preferred stock on which the right to receive dividends is forfeited for any year that the dividends ar declared is referred to as: a. cumulative preferred stock b. participating preferred stockd. noncumulative preferred stock c. callable preferred stock

Explanation / Answer

7) Bonds issued for $600,000 coupon rate 11% Term 15 Issued price 102% Interest per annum $66,000 Interest for 15 years $990,000 Answer =D 8) Answer = C 9) Answer =D 10) Answer =A 11) Answer =B 12) Answer =C 13) Answer =B 14) Answer =D

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