1) For a $1,000 bond that pays 6% semiannually, the company would pay

Multiple choice question.

- $30 every year.

- $30 every six months.

- $60 every year.

- $60 every six months.

2) A $1,000 10-year bond pays interest annually at a stated rate of 6%. The market rate at the date of issuance is 8%. One step in computing the price of the bond is to discount

Multiple choice question.

- $60 using an ordinary annuity with 8%.

- $80 using an ordinary annuity with 6%.

- $80 using an ordinary annuity with 8%.

- $60 using an ordinary annuity with 6%.

3) When a firm early extinguishes bonds that were issued at a premium, and the fair value of the bond is less than the book value of the bond,

Multiple choice question.

- Bonds payable would be credited.

- Bond premium is credited.

- Cash would be debited.

- Gain would be credited.

4) Upon the issuance of a bond with a premium, Bonds payable is credited for

Multiple choice question.

- more than the face amount.

- the face amount.

- the difference between the face amount and the issue price.

- less than the face amount.

5)When a firm early extinguishes bonds that were issued at a premium, and the fair value of the bond is greater than the book value of the bond,

Multiple choice question.

- Bond premium is debited.

- Bonds payable would be credited.

- Cash would be debited.

- Gain would be credited.