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a legal record which summarizes the rights and also privileges the bondholders and the obligations and commitments the the issuing company is called:

a. A bond indenture

b. A shortcut debenture

c. Trade on the equity

d. A ax bond


stockholders the a firm may be wake up to finance expansion through issuing much more equity because:

a. Leveraging through a debt is constantly a much better idea

b. Their earnings per share might decrease

c. The price that the share will automatically decrease

d. Dividends need to be paid on a regular basis


the contractual interest rate is constantly stated as a(n):

a. Monthly rate

b. Day-to-day rate

c. Semiannual rate

d. Annual rate


premium on bond payable:

a. Has a debit balance

b. Is a contra account

c. Is taken into consideration to it is in a palliation in the expense of borrowing.

You are watching: The contractual interest rate on a bond is often referred to as the

d. Is deducted native bonds payable on the balance sheet.


if the industry interest rate is better than the coupon (stated) interest rate, bonds will sell:

a. At a premium

b. At a challenge value

c. In ~ a discount

d. Only after the proclaimed interest rate is increased


the adhering to exhibit is because that Target bonds.

Bonds close yield volume net change

targ. 8 1/8 100 1/4 8.2 35 +7/8

the contractual interest price of the target shortcut is:

a. Higher than the industry interest rate

b. Less than the industry interest rate

c. Equal to the industry interest rate

d. Not determinable


on january 1, 2005, approve corporation approve $4,000,000, 10-year, 8% bonds at 102. Attention is payable semiannually top top january 1 and also july 1. The journal entry to document this transaction ~ above january 1, 2005 is:

a. Cash 4,000,000

bonds payable 4,000,000

b. Cash 4,080,000

binding payable 4,080,000

c. Premium on binding payable 80,000

cash 4,000,000

binding payable 4,080,000

d. Cash 4,080,000

binding payable 4,000,000

premium on bond pay. 80,000


in the balance sheet, mortgage note payable space reported as:

a. A existing liability only

b. A permanent liability only

c. Both a current and a long-term liability

d. A existing liability other than for the reduction in principal amount


bonds that might be exchanged for usual stock in ~ the choice of the bondholders space called:

a. Options

b. Share bonds

c. Convertible bonds

d. Callable bonds


when authorizing bonds to be issued, the plank of director does not specify the:

a. Total number of bonds authorized to it is in sold

b. Contractual attention rate

c. Offering price

d. Total face value of the bonds


bonds that are subject to retirement at a stated dollar amount before maturity at the option of the issuer room called:

a. Callable bonds

b. Early on retirement bonds

c. Options

d. Debentures


investors who receive checks in their names for interest paid on bonds have to hold:

a. Registered bonds

b. Coupon bonds

c. Bearer bonds

d. Straight bonds


corporations are granted the strength to worry bonds through:

a. Taxation laws

b. State laws

c. Federal defense laws

d. Bond debentures


the party who has actually the ideal to exercise a contact option on binding is:

a. Invest banker

b. Bondholder

c. Bearer

d. Issuer


Lowe agency has $1,500,000 of bond outstanding. The unamortized premium is $19,600. If the firm redeemed bonds at 101, what would be the gain or lose on the redemption?:

a. $4,600 gain

b. $4,600 loss

c. $15,000 gain

d. $15,000 loss


the current carrying value of Lane"s $800,000 challenge value bond is $797,000. If the bonds space retired in ~ 103, what would be the quantity Lane would certainly pay its bondholders?:

a. $797,000

b. $800,000

c. $820,000

d. $824,000


if sixty $1,000 convertible bonds with a transferring value the $70,000 space converted right into 9,000 share of $5 par value typical stock, the newspaper entry to record the switch is:

a. Bonds Pay. 70,000

usual stock 70,000

b. Bonds salary 60,000

premium binding 10,000

common stock 70,000

c. Bonds pay 60,000

prem. Bond 10,000

common stock 45,000

paid-in lid excess par 25,0000


when a firm retires bonds before maturity, the get or lose on redemption is the difference in between cash paid and the:

a. Transporting value of the bonds

b. Face value the the bonds

c. Original selling price the the bonds

d. Maturity value of the bonds


A mortgage keep in mind payable through a addressed interest rate requires the borrower to do installment payments over the hatchet of the loan. Each installment payment has interest ~ above the unpaid balance of the loan and a payment ~ above the principal. V each installment payment, suggest the effect on the portion allocated to interest expense and the section allocated come principal.:

a. Increase/increase

b. Increase/decrease

c. Decrease/decrease

d. Decrease/increase


corporations invest in other companies for every one of the adhering to reasons other than to:

a. Home excess cash until needed

b. Create earnings

c. Meet strategic goals

d. Rise trading of the various other companies" stock


a typical invest to residence excess cash until needed is:

a. Stocks of providers in a associated industry

b. Blame securities

c. Low-risk, extremely liquid securities

d. Stock securities


pension funds and also mutual funds regularly invest in debt and also stock securities to:

a. Generate earnings

b. Home excess cash until needed

c. Meet strategic goals

d. Regulate the firm in which they invest


at the moment of acquisition of a blame investment:

a. No journal entry is required

b. The historical expense principle applies

c. The stock investments account is debited once bonds room purchased

d. The invest account is credited for its cost plus brokerage fees


the cost of blame investments consists of each the the following except:

a. Brokerage fees

b. Commissions

c. Accrued interest

d. The price paid


Bay company acquires 60, 8%, 5 year, $1,000 ar bonds on jan 1, 2014 because that $60,000. The newspaper entry to record this investment consists of a blame to:

a. Blame investments for 64,800

b. Blame investments for 60,000

c. Cash because that 60,000

d. Stock investments because that 60,000


Ban co. Purchase 50, 5% Waylan firm bonds because that $50,000 cash plus brokerage fees of $500. Interest is payable semiannually top top july 1 and jan 1. The entry to document the july 1 semiannual interest payment would include a:

a. Debit to interest receivable for 1250

b. Credit to interest revenue because that 1250

c. Credit transaction to interest revenue because that 1262.50

d. Credit to debt investments because that 1262.50


in bookkeeping for share investments in between 20% and also 50%, the ___ an approach is used.:

a. Consolidated statements

b. Regulating interest

c. Cost

d. Equity


Jacobs Corporationmakes a short-term investment in 100 share of Starr Company"s typical stock.The share is purchased for $40 a share to add brokerage fees of $300. The entryfor the purchase is

a. Blame Investments............................... 4,000 Cash................................................................. 4,000

b. Stock Investments.............................. 4,300 Cash............................................................... 4,300 c. Share Investments............................... 4,000

BrokerageFee Expense...................................... 300 Cash.......... ...................................................... 4,300 d. Stock Investments............................. 4,000 Cash............................................. .................... 4,000


B. Stock investments 4,300

cash 4,300


Carson Corporation sells 100 shares of common stockbeing hosted as a short-lived investment. The shares were got six months earlier ata expense of $50 a share. Carson offered the shares for $40 a share. The entry torecord the revenue is

a.Cash...................................................... 4,000

Loss on revenue of share Investments................ 1,000 stock Investments........................................... 5,000 b.Cash.................................................. 5,000

Gain on revenue of stock Investments............... 1,000

Stock Investments......................................... 4,000 c.Cash............................................................... 4,000 share Investments............................. 4,000

d. Share Investments............................... 4,000 ns on sale of share Investments................ 1,000 Cash.................................................................. 5,000


A. Cash 4,000

loss of sale stock investments 1,000

share investments 5,000


cash equivalents perform NOT include:

a. Temporary corporate notes

b. Treasury bills

c. Money sector funds

d. 2-year certificates of deposit


D. 2-year certificates of deposit


Nagen firm had this transactions in connection with to share investments: Feb. 1 to buy 3,000 share of Horton agency (10%) for $49,800 cash plus brokerage fees the $1,200.June 1 obtained cash dividends of $2 per share on Horton stock.Oct. 1 Sold1,200 shares of Horton stock for $24,000 less brokerage fees the $600.

a. Debit to stock Investments because that $49,800.

b. Credit to Cash for $49,800.

c. Debit to stock Investments because that $51,000.

d. Debit to Investment expense for $1,200.


C. Debit to stock investments for 51,000


Mouns agency owns 30% attention in the share of Darian Corporation. Throughout the year, Darian pays $20,000 in dividends, and also reports $100,000 in net income. Mouns Company’s investment in Darian will boost Mouns’ net earnings by (SHOW CALCULATIONS for complete credit)

a. $15,000.

b. $30,000.

c. $24,000.

d. $6,000.


B. 100,000x30% = $30,000


For accounting purposes, the an approach used come account for permanent investments in usual stock is determined by

a. The amount paid because that the share by the investor.

b. The extent of one investor"s affect on the operating and financial affairs of the investee.

c. Even if it is the stock has actually paid dividends in previous years.

d. Even if it is the acquisition of the share by the investor to be "friendly" or"hostile."


B. The degree of one investor"s influence on the operating and financial work of the investee


When an investors owns in between 20% and 50% the the typical stock of a corporation, it is generally presumed the the investor

a. Has insignificant influence on the investee and that the cost an approach should be used to account because that the investment.

b. Should apply the cost an approach in accounting for the investment.

c. Will certainly prepare consolidated financial statements.

d. Has far-reaching influence on the investee and that the equity an approach should be provided to account for the investment.


D. Has far-ranging influence on the invested that the equity an approach should be provided to account because that the investment.


Lanier markets owns45% that McCoy Company. For the existing year, McCoy reports net revenue of$250,000 and also declares and also pays a $60,000 cash dividend. I m sorry of the adhering to correctly presents the newspaper entries to record Lanier"s equity in McCoy"s network income and also the receipt of dividends from McCoy?

a. Dec. 31 stock Investments............. 112,500

Rev. From investment in McCoy Company..... 112,500

Dec. 31 Cash..................................... 27,000

Stock Investments.................................... 27,000

b. Dec. 31 share Investments................... 112,500 Rev. From invest in McCoy agency ........................................ 112,500

Dec. 31 Cash...................................... 60,000

Stock Investments.......................... 60,000

c. Dec. 31 share Investments..................... 85,500

Rev.from invest in McCoy Company....................................... 85,500


A. Dec 31 stock investments 112,500

revenue in mccoy firm 112,500

Dec 31 cash 27,000

share investments 27,000


Consolidated gaue won statements room prepared once a firm owns _________ of the typical stock of another company.

a. Less than 20%

b. Between20% and also 50%

c. Less than 50%

d. An ext than 50%


D. An ext than 50%


On respectable 1, Masters firm buys 2,000 shares ofABD common stock for $72,500 cash. Top top December 1, the share investments aresold because that $75,000 in cash. I beg your pardon of the adhering to are the exactly journalentries to record for the purchase and also sale that the typical stock?


Aug 1 share investments 72,500

cash 72,500

Dec 1 share investments 75,000

cash 72,500

get on sale of share 2,500


At the finish of its first year,the commerce securities portfolio contained the following common stocks. Expense Fair worth Atrium coporation, group $ 46,500 $ 50,000Barnes Inc. 60,000 58,000Cantor copy, group 80,000 76,400 $186,500 $184,400 In the complying with year, the Barnes typical stock is marketed for cash proceeds of$57,000. The gain or loss come be well-known on the revenue is a

a. Get of $1,200.

b. Loss of $3,000.

See more: Lyr I Ve Been Looking Under Rocks And Breaking Locks, Jason Derulo

c. Lose of $1,000.

d. Ns of $2,000.


A. Get of 1200


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