Indicate whether each statement is true or false. 1. The term restricted retained earnings refers to statutory but not contractual restrictions. 2. If the dividends account is not recorded as a reduction to Retained Earnings on the date of declaration, the dividends account is closed to Retained Earnings at the end of the accounting period. 3. Book value per share reflects the value per share if a company is liquidated at balance sheet amounts. 4. A stock dividend does not reduce a corporation's assets or its stockholders' equity. 5. Common Stock Dividend Distributable is a liability account.

Indicate whether each statement is true or false.

[ Select ] ["False", "True"] 1. Operating leases are long-term or non-cancelable leases in which the lessor transfers substantially all the risks and rewards of ownership to the lessee.

[ Select ] ["False", "True"] 2. An advantage of bond financing is that issuing bonds does not affect owner control.

[ Select ] ["False", "True"] 3. The contract rate of interest is the rate that borrowers are willing to pay and lenders are willing to accept for a particular bond and its risk level.

[ [ Select ] ["False", "True"] 4. A lessee has substantially all of the benefits and risks of ownership in an operating lease.

[ Select ] ["True", "False"] 5. A 10-year bond issue with a $100,000 par value, 8% annual contract rate, with interest payable semiannually means that the issuer must repay $100,000 at the end of 10 years and make 20 semiannual interest payments of $4,000 each.