__ 1. Discount on Bonds Payable

__ 2. Amortizacin de "Premium on Bonds Payable"

__ 3. Loss on Redemption of Bonds

__4. "Callable Bonds"

__ 5. Premium on Bonds Payable

__ 6. Amortizacin de "Discount on Bonds Payable"

__ 7. Bonds Payable

__ 8. Market Rate = Coupon Rate of Bonds

__ 9. Book Value of Bonds

__ 10. Gain on Redemption of Bonds

__ 11. Bond indenture o trust indenture

__ 12. Convertible bonds

__ 13. Term bonds

A. They can be redeemed before their expiration date.

B. The bond is sold for its "face amount".

C. Contract mediating between the company that issues the bonds and the company that invests in bonds.

D. All bonds issued have the same maturity date.

E. It occurs if the redemption price is less than the book value of the bonds.

F. It results because the market rate is greater than the coupon rate of the bonds.

G. Bonds Payable + Unamortized Premium on Bonds.

H. They can be exchanged for other securities such as shares.

I. It results because the market rate is less than the coupon rate of the bonds.

J. It occurs if the "redemption price" is greater than the "book value" of the bonds.

K. Interest expense increases.

L. Interest is paid periodically, and principal is paid on the due date.

M. Decrease interest expense.

1. On July 1, 2013, Wichita Corp. issued (issued) $ 175,000 bonds maturing in 4 years. The interest rate on the bonds (coupon rate) is 16% and the prevailing market interest rate (effective interest rate) is 12%. Bond interest is paid quarterly on September 30, December 31, March 31, and June 30. The company's fiscal year is the calendar year. The present value factors to calculate the price of the bond issue are _____ for the principal, _____ for the payment of interest and the bonds will be issued with ___________.

a. .6232, 12.5611, discount

b. .5339, 11.6523, discount

c. .5339, 11.6523, cousin

d. .6232, 12.5611, cousin

2. If a corporation plans to issue $ 1,000,000 in bonds whose coupon rate is 12% while the prevailing market interest rate is 10%, the bonds will be sold:

a. for its "face amount".

b. with premium (premium on bonds)

c. with discount (discount on bonds)

d. at a price below its "face amount"

3. If the Bonds Payable account has a balance of $ 900,000 and the Discount on Bonds Payable account has a balance of $ 72,000, how much is the "carrying amount" or "book value" of the bonds?

a. $ 828,000

b. $ 900,000

c. $ 972,000

d. $ 580,000

4. The payment made periodically for the bonds (Bonds Payable) includes a portion for the payment of interest and another portion to pay the principal.

a. true

b. False

5. The concept of "coupon rate" or "effective interest rate" are the same way of referring to the prevailing interest rate in the market.

a. true

b. false

6. The concept of present value means that an amount of money to be received in the future is equivalent to that same amount to be received in the present.

a. true

b. false

7. If the market interest rate is 8% and the bond issued by the company pays 7%, the bond will be issued with a premium.

a. true

b. false

8. If the Bonds Payable account has a balance of $ 875,000 and the Premium on Bonds Payable account has an unamortized balance of $ 35,000, how much is the carrying amount" or" book value "of the bonds?

a. $ 840,000

b. $ 900,000

c. $ 910,000

d. $ 950,000

9. If the Bonds Payable account has a balance of $ 875,000 and the Discount on Bonds Payable account has a balance of $ 35,000 unamortized, how much is the "carrying amount" or "book value" of the bonds?

a. $ 910,000

b. $ 900,000

c. $ 950,000

d. $ 840,000

10. Assume that the Bonds Payable account has a balance of $ 900,000 and the Premium on Bonds Payable account has a balance of $ 35,000 unamortized. If that debt is canceled with $ 925,000, it occurs:

a. a loss of $ 10,000

b. a profit of $ 10,000

c. a loss of $ 25,000

d. a profit of $ 25,000

11. Assume that the Bonds Payable account has a balance of $ 900,000 and the Premium on Bonds Payable account has a balance of $ 35,000 unamortized. If that debt is canceled with $ 945,000, it occurs:

a. a loss of $ 10,000

b. a profit of $ 10,000

c. a loss of $ 45,000

d. a profit of $ 45,000

12. If the market interest rate is 13% and the bond issued by the company pays 15%, the bond will be issued with a premium.

a. true

b. False

13. If the market interest rate is 8%, the sale price of bonds that pay 6% interest semi-annually (semiannually) and whose principal is $ 100,000 will be

a. less than $ 100,000

b. greater than $ 100,000

c. equal to $ 100,000

d. greater or less than $ 100,000; depends on the maturity date of the bonds