Question 1 View Policies Current Attempt in Progress A $1180 face value bond with a quoted price of 95 is selling for $1121. $1112 $1180 $95. Save for Later Question 3 View Policies Current Attempt in Progress Which of the following is a disadvantage of issuing bonds instead of common shar The principal of the debt must be repaid at maturity. Earnings per share will increase. Income to common shareholders may increase. Shareholder control is not affected. Save for Later Question 4 View Policies Current Attempt in Progress Bonds Splish Brothers Coupon Maturity Date Bid $ Yield % 7.330 Dec. 22/26 101.605.16 The contractual interest rate of the Splish Brothers bonds is greater than the market rate of interest. less than the market rate of interest. equal to the market rate of interest. not determinable. Question 2 View Policies Current Attempt in Progress If a corporation issued $4230000 in bonds that pay 6% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 35%? $253800 $88830 $2115000 $164970 Attempts: 0 of 1 used Submit Save for Later Question 6 View Policies Current Attempt in Progress The present value of a $9100,5-year bond, will be less than $9100 if the bond is redeemable. contractual rate of interest is less than the market rate of interest. contractual rate of interest is greater than the market rate of interest. contractual rate of interest is equal to the market rate of interest. Save for Later Question 5 View Policies Current Attempt in Progress If the market rate of interest is greater than the contractual rate of interest, bonds will sell at face value. only after the stated rate of interest is increased. at a discount. at a premium Save for Later Question 7 View Policies Current Attempt in Progress Which of the following is a factor considered in establishing the present value of a bond? Face value to be repaid at maturity Market interest rate Contractual interest rate All of the above Save for Later 34:0 Question 8 View Policies Current Attempt in Progress If the market rate of interest on similar bonds is paying interest at a rate of 5.1% when the bond issue has a contractual rate of 4.1%, the bonds will be issued at a discount. a premium face value. par value Attempts: 0 of 1 used Submi Save for Later Question 9 View Policies Current Attempt in Progress On January 1, 2021. $920000,5-year, 4% bonds, were issued for $841496. The interest rate in effect when the bonds were issued was 5%. Interest is paid semi-annually on January 1 and July 1. What would be the amount of discount amortized on July 1, 2021? (Round intermediate calculations to 5 decimal places.) $981 $2637 $1570 $785 Attempts: 0 of 1 used Submit Answer Save for Later Question 10 View Policies Current Attempt in Progress What impact will the amortization of a bond discount have on reported interest expense? increase decrease increase or decrease depending on the amortized cost no impact Save for Later Question 11 View Policies Current Attempt in Progress Concord Corporation issues 1,000, 10-year, 9%, $1000 bonds dated January 1, 2021, at 97. The journal entry to record the issue will show a debit to Cash for $970000. credit to Bonds Payable for $1000000 debit to Cash for $1000000. credit to Discount on Bonds Payable for $30000. Save for Later Attempts: 0 of Question 14 View Policies Current Attempt in Progress If bonds with face value of $100000 are redeemed before maturity when the amortized cost is $92800, what would be the resulting gain or loss on the transaction? loss of $928 loss of $6200 gain of $6200 gain of $928 Attempts: 0 of 1 used Submit Answer Save for Later Question 15 View Policies Current Attempt in Progress The sale of bonds above face value will cause the total cost of borrowing to be less than the bond interest paid. is a rare occurrence. will have no net effect on Interest Expense by the time the bonds mature, will cause the total cost of borrowing to be more than the bond interest paid. Save for Later Question 16 View Policies Current Attempt in Progress Which of the following is necessary when recording the redemption of bonds Record the gain or loss on redemption. Record the cash paid. Eliminate the amortized cost of the bonds. All of the above Save for Later Question 12 View Policies Current Attempt in Progress On January 1.2021. $1140000,5-year, 6% bonds, were issued for $1092597. The interest rate in effect when the bonds were issued was 7%. Interest is paid semi-annually on January 1 and July 1. How much interest is paid at each interest payment date? $68400 $79800 $34200 $39900 Attempts: 0 of 1 used Submit Answer Save for Lator