In theory, the proceeds from the sale of a bond will equal to the face amount of the bond. present value of the principal amount due at the end of the life of the bond plus the present value of the interest payments made during the life of the bond plus transaction costs. face amount of the bond plus the present value of the interest payments during the life of the bond. present value of the principal amount due at the end of the life of the bond plus the present value of the interest payments made during the life of the bond.

In theory, the proceeds from the sale of a bond will equal to the face amount of the bond. present value of the principal amount due at the end of the life of the bond plus the present value of the interest payments made during the life of the bond plus transaction costs. face amount of the bond plus the present value of the interest payments during the life of the bond. present value of the principal amount due at the end of the life of the bond plus the present value of the interest payments made during the life of the bond.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter11: Notes, Bonds, And Leases

Section: Chapter Questions

Problem 6Q

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The principal of a bond is ________. A. the person who sold the bond for the company B. the person who bought the bond C. the interest rate printed on the front of the bond D. the face amount of the bond that will be paid back at maturity
The premium on bonds payable account is shown on the balance sheet as A contra asset. A reduction of an expense. An addition to a long-term liability. A subtraction from a long-term liability.
The effective-interest method of bond amortization finds the difference between the ________ times the ________ and the ________ times the ________. A. stated interest rate, principal, stated interest rate, carrying value B. stated interest rate, principal, market interest rate, carrying value C. stated interest rate, carrying value, market interest rate, principal D. market interest rate, carrying value, market interest rate, principal
Does issuing a bond at a discount increase or decrease interest expense over the life of the bond?
In theory (disregarding any other marketplace variables), the proceeds from the sale of a bond will be equal to The face amount of the bond plus the present value of the interest payments made during the life of the bond. The sum of the face amount of the bond and the periodic interest payments The face amount of the bond The present value of the bond maturity value plus the present value of the interest payments to be made during the life of the bond.
The total interest expense over the entire life of a bond is equal to the sum of the interest payments plus the total discount or minus the total premium related to the bond. True False
What is the total amount of interest revenue that Redbud will recognize over the life of the bonds?
If the straight-line method of amortization of bond premium or discount is used, which of the following statements is true? Group of answer choices Total interest expense will increase over the life of the bonds with the amortization of bond discount. Total interest expense will increase over the life of the bonds with the amortization of bond premium. Total interest expense will decrease over the life of the bonds with the amortization of bond discount. Total interest expense will remain the same over the life of the bonds with the amortization of bond discount.
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The discount on a bond payable becomesa. additional interest expense in the year the bonds are sold.b. a reduction of interest expense in the year the bonds mature.c. a reduction in interest expense over the life of the bonds.d. additional interest expense over the life of the bonds.