1. What is a liability? What is it a result of?

2. On page 12-10 know what conditions must be met before a short-term obligation may be properly excluded from the current liability classification.

3. Bond discount should be presented in the financial statements of the issuer as a ______________

Liability.

4. The market price of a bond issued at a discount is the present value of what two things?

Know how to calculate or determine it.

5. If a bond issue sells for more than its face value, the market rate of interest is less or more than the stated rate?

6. What does the issuance price of a bond depend on?

7. What are callable bonds?

8. The net amount of a bond liability that appears on the balance sheet is the face value of the bond plus the related __________________________ or minus the related __________________.

9. How do you calculate the interest expense when using the effective-interest amortization method?

10. How does accrued interest on bonds that are sold between interest dates affect the amount a buyer pays for the bonds?