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Multiple Choices Interest expense in GAAP financial statements is computed based on: The coupon rate times the carrying value of the debt The coupon rate
Multiple Choices
- Interest expense in GAAP financial statements is computed based on:
- The coupon rate times the carrying value of the debt
- The coupon rate times the face value of the debt
- The effective rate times the carrying value of the debt
- The effective rate times the face value of the debt
- Coopers Inc. issued $10,000,000 of 10-year bonds on 1/1/2016 for $10,858,432. The bonds pay interest semi-annually. A journal entry was recorded for the first interest payment on June 30th, which included a debit to interest expense of $162,876.48 and a credit to cash of $200,000. What was the annual coupon rate on these bonds?
- 3%
- 5%
- 4%
- 6%
- When a bond is sold at a discount
- Interest expense will be more than interest paid each period
- Interest expense will be less than interest paid each period
- Interest expense will be the same as interest paid each period
- Interest expense can be either more or less than interest paid each period
- Which of the following describes the impact on the balance sheet of a Lessee that results from capitalizing (recording) a Finance or Operating lease?
- Assets and Liabilities both increase
- Assets and Liabilities both decrease
- Assets increase and Liabilities decrease
- Assets decrease and Liabilities increase
- One of the largest current liabilities on an airlines balance sheet is unearned revenue typically called air traffic liability; i.e. the amount collected for tickets that have been sold, but not yet flown. Which of the following accounting principles is most closely associated with the recognition of this liability?
- Conservatism
- Revenue Recognition
- Matching
- Materiality
- In a typical home mortgage, the portion of the loan payment in the fifth month that is recorded as interest expense....
- Is the same as the fourth month
- Is less than the fourth month
- Is more than the fourth month
- Is the same as the amount of principal amortization
- Which of the following is typically true from the standpoint of the Lessee?
- A Lessee will record more expense over the life of a Finance lease than an Operating lease.
- The Lessee will record less expense over the life a Finance lease than an Operating lease.
- The lessee will record the same expense over the life of the lease whether it is treated as a Finance lease or an Operating lease
- Over the life of a lease, total expenses for an Operating lease will equal the manufacturers profit for a Sales-Type lease.
- How are payments made by a Lessee under a Finance lease reported on a Statement of Cash Flows?
- They are reported as Cash Flows from Operations
- They are reported as Cash Flows from Financing Activities
- The interest component is treated as a Cash Flow from Operations and the principal component as treated as a Financing Activity
- The interest component is treated as an Investing Activity and the principal component is treated as a Financing Activity
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