Multiple Choice Question 152

If the market interest rate for a bond is higher than the stated interest rate, the bond will sell at

par.

either discount or premium.

a discount.

a premium.

Multiple Choice Question 161

If bonds are issued at a premium, the stated interest rate is

adjusted to a higher rate of interest.

higher than the market rate of interest.

lower than the market rate of interest.

too low to attract investors.

Multiple Choice Question 195

When bonds are retired before maturity,

only a loss on redemption can be recorded.

only a gain on redemption can be recorded.

either a gain or a loss on redemption can be recorded.

neither a gain nor a loss on redemption can be recorded.

Multiple Choice Question 169

Selling the bonds at a premium has the effect of

increasing the amount of cash paid for interest each 6 months.

causing the total cost of borrowing to be higher than the bond interest paid.

causing the total cost of borrowing to be lower than the bond interest paid.

raising the effective interest rate above the state interest rate.

Multiple Choice Question 177

Bond discount should be amortized to comply with

the historical cost principle.

the expense recognition principle.

the revenue recognition principle.

conservatism.