of the following Premium on bonds payable is an. adjunct account.
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- When bonds are redeemed before maturity, how is the gain or loss on redemption determined? Why does the calculation differ for bonds issued at face value, at a premium, and at a discount?Which of the following statement is false about premium on bonds payable? It decreases the carrying value of the bonds It is an adjunct account It is recognized when stated rate is higher than effective rate It is recognized when cash proceeds is more than the face value of the bondsWhich of the following is true of a discount on bonds payable? it is a contra-stockholders’ equity account it is an account that appears only in the books of the investor it increases when amortization entries are made until it reaches its maturity it decreases when amortization entries are made until its balance reaches zero at the maturity date
- Which is true when a bond payable is issued at a discount? Proceeds from issuance is lower than the face amount. The nominal rate is higher than the effective rate. The carrying amount of the bonds decreases each period. The interest paid is higher than the interest expense.Which 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.PLEASE ANSWER ALL THE QUESTIONS AND THE IMAGE ATTACHED 1. a bond is a liability of the issuing company and a share represents part ownership in the company true false 2. There is no tax advantage with bonds when issued by companies True False 3. The Contract rate is also known as the coupon or stated rate that is identified in the indenture true false 4. The effective interest method of amortizing bonds allocates the same amount of expense to each period true false 5. there is an inverse relationship between market interest rates and bond prices true false 6. ABC company issued a bond on january 2 2020 with a face value of 800000 and sold at 775000. the bond is a discount bond true false 7. DEF Company issued a 5 year bond on january 2 2020 with a par value of 700000. the bond pays its investors every six months. the coupon rate is 6% and the market rate is 7%. How much coupon cash interest payment does DEF company pay its investors every six months 8. GHI Company issued a 7…
- Which of the following statements relating to bonds is incorrect? a. A bond is a debt instrument giving the issuer flexibility as to maturity date. b. None of the choices c. A bond’s face value is the amount the issuer must pay to the bondholder at maturity d. The owner of a registered bond is the person to whom interest payments are mailed. e. A bond will typically sell at a discount when its nominal rate is less than the current market rate of interestWhich of the following statements about Floating-Rate Debt is NOT true? A) Floating-rate debt has a stated interest rate that fluctuates in tandem with some interest rate benchmark (for instance, LIBOR). B)Floating-rate bonds allow companies to keep reported book value and fair value at the same level that protects investors from losses. C)The issuing company benefits from floating-rate debt when market interest rates increase. D)Floating-rate debt is issued at par.Which of the following statements correctly describes aspects of simple interest as discussed in lectures? Group of answer choices A. More than one of the other statements are correct B. None of the other statements are correct C. loan that has been created that pays simple interest, will involve interest payments that are calculated on the basis of both the principal amount borrowed as well as any interest that has accumulated to date. D. By convention, simple interest is the main method used for the pricing of short-term debt securities like Treasury Notes. E. With simple interest, the future value of any cash flow is simply its current value discounted back at a rate of r% per period for n periods. I already know that C and D are compound interests however I am not sure about option E.
- Which of the following statements is not correct? a) The export value of the bond; the value the investor pays when buying bonds b) Nominal value of the bond; is the value written on the bond c) Another reason for the difference in bond market prices is the dividend paid to bonds. d) Periodic interest amounts on bonds are calculated at nominal value. e) Market value of a bond is equal to the present value of the interest to be paid by the bond and the principal amount to be paid at the end of maturity. ------------------ What is the market value of İdil Gıda's bond with a nominal value of 15000 USD, maturity of 3 years and 30% annual interest payment, assuming that the desired yield rate is 36%? a) 12500b) 13494c) 9000d) 5456e) 7594 ============ What is the market value of Beril Gıda A.Ş.'s bond with a nominal value of USD 12,000, maturity of 5 years and an annual interest payment of 25%, when the desired rate of return is 25%? a) 18000b) 15000c) 12000d) 16000e)…Which of the following events would make it more likely that a company would call its outstanding callable bonds? State your reason for the answer. The company’s bonds are downgraded. Market interest rates rise sharply. The company's financial situation deteriorates significantly. Inflation increases significantly. Market interest rates decline sharplyWhen bonds and other debt securities are issued, payments such as legal costs, printing costs, and underwriting fees, are referred to as debt issuance costs (called transaction costs under IFRS). If Rushing International prepares its financial statements using IFRS: a. the recorded amount of the debt is increased by the transaction costs. b. the decrease in the effective interest rate caused by the transaction costs is reflected in the interest expense. c. the transaction costs are recorded separately as an asset. d. the increase in the effective interest rate caused by the transaction costs is reflected in the interest expense.
