1- January 1, 2011, Nadir Company issued $1,000,000 of 6%, 20-year bonds when the market rate of interest was 5%. The bonds pay interest annually on December 31. Nadir uses the effective interest method of amortization. On income statement for the year ended December 31, 2011, Nadir will show interest expense of Select one: a. more than $60,000 b. The answer cannot be determined without knowing the price for which the bonds were sold. c exactly $60,000 d. less than $60.000 2- When common stock is issued, the amount recorded in Additional paid-in capital is Select one: a. nothing: Additional paid-in capital is not affected by issuing common stock b. the cash received minus the amount recorded in the Common stock account c the par value plus the market price of the stock d. the cash received plus the amount received in excess of par 3- Markot Corporation purchased $400,000 of securities and classified them as available-for-sale. The market value of the securities went up to $475,000. Markot Corporation should Select one: a. report an unrealized gain on its income statement b. report a holding loss on its income statement c. report a holding gain on its income statement d. show these securities on its balance sheet at their market value 4- Which of following is NOT a step that should be taken to minimize risk associated with long-term debt? A company should Select one: a. conduct a thorough business analysis when a decision is made to borrow money b. make sure that there is a high probability of positive financial leverage c. maximize its debt-to-equity ratio d. evaluate the characteristics of the various types of debt 5- On December 31, IOU Corporation issued $100,000 of 10-year, 8% bonds at 98. The bonds pay interest annually on December 31. How much cash did IOU Corporation receive when the bonds were issued? Select one: a. $108,000 b. $784,000 C $100,000 d. $98,000 6- Items that are both unusual in nature and infrequent in occurrence are considered Select one: a. items of other revenues and expenses b. discontinued operations C. extraordinary items d. changes in continuing operations

7- On January 1, 2011, Nadir Company issued $1,000,000 of 6%, 20-year bonds when the market rte of interest was 5%. The bonds pay interest annually on December 31. How much cash did Nadir receive when the bonds were sold? Select one: a. $1,124,622.60 b. $950,386 c. $1,065,085.20 d. $1,000,000

8- gain on its income statement b. report a holding loss on its income statement c report a holding gain on its income statement d. show these securities on its balance sheet at their market value

9- If a company were to manipulate the statement of cash flows to please analysts, it would most likely report cash received Select one a from the sale of intangible assets as cash from the sale of capital assets b. from loans as cash collected from customers c. from the sale of land as cash received from the issuance of stock d. from the sale of stock as cash from the sale of intangible assets

10- On January 1, 2011, Bondz, Inc. issued $1,000,000 of 10%, 10-year bonds when the market rate of interest was 12%. The bonds pay interest QUARTERLY. To calculate the amount of cash that Bondz received, you must use a discount rate of Select one: a. 10% b. 4% c. 12% d. 3%