ACC 206 Week 7 Quiz Chapter 15 -
Multiple Choice Question 110
In a lease contract,
- the owner of the property is called the lessee.
- the presence of a bargain purchase option indicates that it is a capital lease.
- the renter of the property is called the lessor.
- there is always a transfer of ownership at the end of the lease term.
Multiple Choice Question 51
A bondholder that sends in a coupon to receive interest payments must have a (n)
- mortgage bond.
- unsecured bond.
- serial bond.
Multiple Choice Question 94
If bonds can be converted into common stock,
- the bondholder may benefit if the market price of the common stock increases substantially.
- they will be converted only if the issuer calls them in for conversion.
- they will carry a higher interest rate than comparable bonds without the conversion feature.
- they will sell at a lower price than comparable bonds without a conversion feature.
Multiple Choice Question 93
If there is a loss on bonds redeemed early, the
- bonds’ carrying value was greater than the redemption price.
- bonds’ carrying value was less than the redemption price.
- loss is debited to Interest Expense, as a cost of financing.
- loss is debited directly to Retained Earnings.
Multiple Choice Question 57
Bonds will always fall into all but which one of the following categories?
- Term or serial
- Registered or bearer
Multiple Choice Question 63
The following exhibit is for Target bonds.
Bonds Close Yield Volume Net Change
8 1/8 17 100¼ 8.2 35 +7/8
On the day of trading referred to above,
- no Target bonds were traded.
- bonds with market prices of $3,500 were traded.
- at closing, the selling price of the bond was higher than the previous day's price.
- the bond sold for $100.25.
Multiple Choice Question 106
Harris Company borrowed $800,000 from Liber Bank on January 1, 2013 in order to expand its mining capabilities. The five-year note required annual payments of $203,013 and carried an annual interest rate of 8.5%. What is the balance in the notes payable account at December 31, 2014?
Multiple Choice Question 83
Rikki Company received proceeds of $188,000 on 10-year, 6% bonds issued on January 1, 2014. The bonds had a face value of $200,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Rikki uses the straight-line method of amortization.
What is the amount of interest Rikki must pay the bondholders in 2014?
Multiple Choice Question 116
In a recent year Chandler Corporation had net income of $150,000, interest expense of $40,000, and tax expense of $20,000. What was Chandler Corporation's times interest earned ratio for the year?
Multiple Choice Question 118
The adjusted trial balance for Otam Corp. at the end of the current year, 2014, contained the following accounts.
5-year Bonds Payable 8% $1,500,000
Interest Payable 50,000
Premium on Bonds Payable 150,000
Notes Payable (3 mo.) 40,000
Notes Payable (5 yr.) 145,000
Mortgage Payable ($10,000 due currently) 300,000
Salaries and Wages Payable 18,000
Taxes Payable (due 3/15 of 2015) 25,000
The total long-term liabilities reported on the balance sheet are