this is just multiple choice questions. dont need explanations.

5.

Which of the following statements describes a subordinated debenture?

A

Debenture holders will receive remaining assets after settlement of mortgage

bonds and accounts payable.

B

Debenture holders will receive remaining assets after settlement of mortgage

bonds.

C

Debenture holders will receive full claim on the amount payable.

D

Debenture holders will receive proportionate distribution of assets.

6.

Which of the following journal entries describes the recording of interest expense,

payment of interest expense and amortization of bond premium?

A

Debit interest expense, credit cash.

B

Debit interest expense and premium on bonds payable, credit cash.

C

Debit interest expense, credit premium on bonds payable and interest payable.

D

Debit interest expense, credit premium on bonds payable and cash.

7.

Which of the following is the effect on amortizing a bond discount?

A

Decreases bond interest expense.

B

Increases the carrying value of the bond.

C

No effect on the bond interest expense.

D

Decreases the maturity value of the bond.

8.

Which of the following refers to the number of shares that a corporation is allowed to

sell?

A

Issued shares.

B

Outstanding shares.

C

Common shares.

D

Authorized shares.