Question
1.when bonds are sold between interest payment dates the amount of accrued interest for the first interest payment must be paid by the buyer A.on
1.when bonds are sold between interest payment dates the amount of accrued interest for the first interest payment must be paid by the buyer
A.on the first interest payment date
B.over the life of the bond
C.when the bond mature
d. TO the trustee
E. none of the above
2.interest expense on a bond is determined by adjusting the interest paid by
A.adding the periodic amortization of the bond discount
B.deducting the periodic amortization of the bond discount
C.adding the unamortized bond discount
D.deducting the unamortized discount
E.none of the above
3.the carrying value of a $5 million bond having $450,000 of unamortized premium would be
A.5,000,000
B.450,000
C.4,55,00
D.none
4.The rate of interest specified on a bond contract is the
A.discount rate
B.effective rate
C.market rate
D,all the above
E, none
5.The rate of interest on a bond determined by market conditions is the
A.nominal rate
B.effective rate
C.face rate
D.discount rate
E. none
6.if the market rate of interest is less than the nominal rate the bonds will sell
A. at discount
B.at par
C.at a premium
D.at face value
E.none
7.if the market rate of the interest is more than the nominal rate the bonds will sell
A.at a discount
B.at a premium
C. at par
D.at face value
E,none
8.if the market rate of interest differers from the nominal rate specified by a bond contract
A. the bonds will sell at par
B.the nominal rate must be adjusted
C.the market rate must be adjusted
D,the bonds will sell at a price other than par
E,none
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