2018/2019 2 6. A $100,000 5-year 6 % bond is issued on The market rate is 7%. What is the discount or premium of the sale of the bonds, rounded to nearest dollar? January 1, 2017. The bond pays interest annually A) $4,100 discount B) $4,100 premium C) $95,900 discount D) $100,000 premium 7. Which statement is correct? A) Dividends an B) A corporation need only pay dividends when it declares them to be payable. never discretionary payments. C) A company can avoid a cumulative dividend on preferred shares if it declares dividends on common shares. D) Companies must pay the shareholders interest to compensate for the time value of money lost on the deferral of dividend payments. 8. Assume that a company issued 10,000 shares for $30 and a par value of $1/share. What entry would be required to reord the repurchase and cancellation of 1,000 shares at $28/share? shres for $28,000. A) Debit to common B) Debit to common shares for $1,000. C) Credit to contributed surplus for $29,000. D) Credit to contributed surplus for $1,000. 9. Which of the following statements is correct about accounting for financial liabilities? A) Financial liabilities can only be accounted for using amortized cost. only be accounted for using fair value though profit and loss. B) Financial liabilities can C) Financial liabilities can be accounted for using historical cost. D) Financial liabilities can be accounted for using amortized cost or fair value