1. Randolph deposits $25,000 for eight years at 8%. If compounding occurs quarterly, then the appropriate time value factor is found at
   1. 2% for 32 periods
   2. 2% for 8 periods
   3. 8% for 32 periods
   4. 8% for 8 periods

2. Jezebel Company signs a contract that calls for a series of equal periodic payments, the first of which will be made on the date the contract is signed. What kind of annuity is this?
   1. An extraordinary annuity.
   2. An ordinary annuity.
   3. A deferred annuity.
   4. An annuity due.

3. Bonds for which the owners' names are not registered with the issuing corporation are called

1. debenture bonds.
2. bearer bonds.
3. term bonds.
4. secured bonds.

4. Bonds that may be exchanged for shares of common stock at a future date are

1. callable bonds.
2. redeemable bonds.
3. convertible bonds.
4. cumulative

5. When bonds are sold at a discount and the straight-line interest amortization method is used, the amount of interest expense at each successive payment date

1. 1. is equal to the change in book value.
   2. increases.
   3. decreases.
   4. remains the same.

6. On the date that interest payments are made under a bond, how do we compute the amount of interest expense?

1. 1. Face value x the stated rate
   2. Face value x the effective rate
   3. Carrying value x the effective rate
   4. Carrying value x the stated rate

7. Ordinarily, the proceeds from the sale of a bond issue will be equal to

1. the sum of the face amount plus all interest payments.
2. the present value of the face amount plus the present value of the stream of interest payments.
3. the face amount of the bond.
4. the face amount plus the present value of the stream of interest payments.

8. On the date that bonds are issued, the bonds payable account is credited for which of the following amounts?

1. Carrying value
2. Market value
3. Face value
4. Present value

9. Which one of these interest rates is not like the others?

1. Effective rate
2. Stated rate
3. Yield rate
4. Market rate

10. A $500,000 bond was issued at 98. The bond

1. 1. sold at face value.
   2. sold at a premium because the stated rate was higher than the effective rate.
   3. sold at a discount because the stated rate was lower than the effective rate.
   4. sold at a discount because the effective rate was lower than the stated rate.

11. What type of account is a premium on bonds payable?

1. Adjunct
2. Contra
3. Equity
4. Expense