11. -82 Eddie Industries issues $1,500,000 of 8% bonds at 105. The amount of cash received from the sale is $1,575,000 $1,000,000 $1,425,000 $1,080,000

12. -83 If the market rate of interest is greater than the contractual rate of interest, bonds will sell only after the stated rate of interest is increased at a premium at face value at a discount

13. -90 The Glenn Corporation issues 1,000, 10-year, 8%, $2,000 bonds dated January 1 at 96. The journal entry to record the issuance will show a debit to Cash of $2,000,000 credit to Bonds Payable for $1,920,000 debit to Discount on Bonds Payable for $80,000 credit to Cash for $1,920,000

14. -92 Bonds with a face amount of $1,000,000 are sold at 106. The journal entry to record the issuance is

15. -58 The market interest rate related to a bond is also called the effective interest rate contract interest rate straight-line rate

stated interest rate

16. TF.12-03 The financial loss that each stockholder in a corporation can incur is usually limited to the amount invested by the stockholder. True False

17. TF.12-05 Double taxation is a disadvantage of a corporation because the corporation has to pay income taxes at twice the rate applied to partnerships. True False

18. TF.12-09 The two main sources of stockholders' equity are investments contributed by stockholders and net income retained in the business. True False

19. TF.12-11 The net increase or decrease in Retained Earnings for a period is recorded by closing entries. True False

20. TF.12-38 Before a stock dividend can be declared or paid, there must be sufficient cash. True False