Sinking Fund Investments would be classified on the balance sheet as
A. a current asset
B. a fixed asset
C. an investment
D. a deferred debit

132. The cash and securities comprising a sinking fund established to redeem bonds at maturity in 2015 should be classified on the balance sheet as
A. fixed assets
B. current assets
C. intangible assets
D. investments

133. The bond indenture may provide that funds for the payment of bonds at maturity be accumulated over the life of the issue. The amounts set aside are kept separate from other assets in a special fund called a(n)
A. enterprise fund
B. sinking fund
C. special assessments fund
D. general fund

134. Sinking Fund Income is reported in the income statement as
A. income from operations
B. extraordinary
C. gain on sinking fund transactions
D. other income

135. If bonds payable are not callable, the issuing corporation
A. cannot repurchase them before maturity
B. can repurchase them in the open market
C. must get special permission from the SEC to repurchase them
D. is more likely to repurchase them if the interest rates increase

136. When callable bonds are redeemed below carrying value
A. Gain on Redemption of Bonds is credited
B. Loss on Redemption of Bonds is debited
C. Retained Earnings is credited
D. Retained Earnings is debited

137. Bonds Payable has a balance of $1,000,000 and Discount on Bonds Payable has a balance of $12,500. If the issuing corporation redeems the bonds at 98, what is the amount of gain or loss on redemption?
A. $7,500 loss
B. $34,500 loss
C. $34,500 gain
D. $7,500 gain

138. Bonds Payable has a balance of $900,000 and Premium on Bonds Payable has a balance of $10,000. If the issuing corporation redeems the bonds at 102, what is the amount of gain or loss on redemption?
A. $1,100 loss
B. $1,100 gain
C. $8,000 loss
D. $8,000 gain

139. A $300,000 bond was redeemed at 98 when the carrying value of the bond was $296,000. The entry to record the redemption would include a
A. loss on bond redemption of $4,000.
B. gain on bond redemption of $4,000.
C. gain on bond redemption of $2,000.
D. loss on bond redemption of $2,000.

140. A $300,000 bond was redeemed at 103 when the carrying value of the bond was $311,000. The entry to record the redemption would include a
A. loss on bond redemption of $2,000.
B. gain on bond redemption of $2,000.
C. gain on bond redemption of $9,000.
D. loss on bond redemption of $9,000.