Bearer bonds are bonds A-with coupons attached that are redeemable by whoever has the bond B-where the registered owner automatically receives bond payments when scheduled C-in which the issue matures on a series of dates. D-issued in another currency other than the bond issuer's home currency.
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- A debenture is ________.A. the interest paid on a bondB. a type of bond that can be sold back to the issuing company whenever the bondholder wishesC. a bond with only the company’s word that they will pay it backD. a bond with assets such as land to back their word that they will pay it backWhich one of the following statements is correct concerning bond classifications? Select one: a. A mortgage security is a bond issued solely by a home builder. b. A note is a bond which has an original maturity date longer than 10 years. c. A debenture is a long-term bond secured by the fixed assets of a firm. d. A callable bond can be repurchased by the issuer prior to the initial maturity date. e. A subordinated bond receives preferential treatment over all other bonds in a bankruptcy.Listed below are terms and definitions associated with bonds. Match (by letter) the bond terms with their definitions. Each letter is used only once. Terms_____ 1. Sinking fund._____ 2. Secured bond._____ 3. Unsecured bond._____ 4. Term bond._____ 5. Serial bond._____ 6. Callable bond._____ 7. Convertible bond._____ 8. Bond issue costs.Definitionsa. Allows the issuer to pay off the bonds early at a fixed price.b. Matures in installments.c. Secured only by the “full faith and credit” of the issuing corporation.d. Allows the investor to transfer each bond into shares of common stock.e. Money set aside to pay debts as they come due.f. Matures on a single date.g. Supported by specific assets pledged as collateral by the issuer.h. Includes underwriting, legal, accounting, registration, and printing fees.
- If bonds are redeemed on maturity date, any premium or discount a. Is carried forward and written off in the same manner as that used prior to the maturity date. b. Should be used to calculate the gain or loss resulting from the maturity of the bonds. c. Should be written off directly to a bond retirement account as the bond will be redeemed. d. Will be fully amortized as its amortization period is designed to coincide with the life of the bond issue.Which of the following would be included in the journal entry to show the conversion of bonds payable with additional consideration (a 'sweetener ' to encourage bondholders to sell their bond back )? (NIE 13) A debit to conversion expense debit to common stock A debit to cash A debit to bond discountWhich of the following statements relating to bonds is incorrect? A. A bond’s face value is the amount the issuer must pay to the bondholder at maturity. B. The owner of a registered bond is the person to whom interest payments are mailed. C. A bond will typically sell at a discount when its nominal rate is less than the current market rate of interest. D. A bond is a debt instrument giving the issuer flexibility as to maturity date.
- ._______ The deposits are used for redeeming a bond issue.In computing the carrying amount of a bond, unamortized _______ is added to the face value of the bond. If a bond sells at a _____________, an amount more than the face value of the bond is received on the date of issuance. If a bond sells at a ____________, an amount less than the face value of the bond is received on the date of issuance.Term bonds are a.bonds that give the issuing corporation the option of calling the bonds for redemption before the maturity date. b.bonds that give the holder the option of exchanging the bonds for capital stock of the corporation. c.bonds issued in a series so that a specified amount of the bonds matures each year. d.bonds that all have the same maturity date.
- The agreements and other terms of the contract between the issuer of the bonds and the one that lends the funds are established in: The surety contracts (bond indenture). Bond obligations (bond debenture). Registered bonds. Voucher coupon.Serial bonds are a. Bonds backed by collateral.b. Bonds that mature in installments.c. Bonds the issuer can repurchase at a fixed price.d. Bonds issued below the face amount.Select the description that best fits each term or phrase. A. Records and tracks the bondholders’ names. B. Is unsecured; backed only by the issuer’s credit standing. C. Has varying maturity dates for amounts owed. D. The legal contract between the issuer and the bondholders. E. Can be exchanged for shares of the issuer’s stock. F. Is unregistered; interest is paid to whoever possesses them. G. Maintains a separate asset account from which bondholders are paid at maturity. H. Pledges specific assets of the issuer as collateral. 1. Registered bond 5. Convertible bond 2. Serial bond 6. Bond indenture 3. Secured bond 7. Sinking fund bond 4. Bearer bond 8. Debenture