1. Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity:

   Date	Cash Paid			Interest Expense			Increase in Carrying Value			Carrying Value
   01/01/2021										$	194,758
   06/30/2021	$	7,000		$	7,790		$	790			195,548
   12/31/2021		7,000			7,822			822			196,370
   06/30/2022		7,000			7,855			855			197,225
   12/31/2022		7,000			7,889			889			198,114
   06/30/2023		7,000			7,925			925			199,039
   12/31/2023		7,000			7,961			961			200,000

   THA issued the bonds:

   		At a premium.
   		At par.
   		At a discount.
   		Cannot be determined from the given information.

2. Which of the following is the number one method of external financing by U.S. companies?

   		Borrowing from banks.
   		Leasing.
   		Issuing installment notes.
   		Issuing bonds

3. Which of the following is not true regarding callable bonds?

   		This feature usually allows the issuer to repay bonds just below face value.
   		This feature allows the issuer to repay the bonds before their scheduled maturity date.
   		This feature benefits the issuer more when the bond's stated rate is 8% and the market interest rate is 5%.
   		This feature helps protect the issuer against future decreases in interest rates

4. At the beginning of the lease period, the lease is reported in the lessee's balance sheet for which amount?

   		Present value of expected cash inflows from using the underlying asset.
   		Fair value of the underlying asset.
   		Leases are not reported in the balance sheet.
   		Present value of lease payments over the lease period.

5. Tomkin Library System issues $5 million in bonds on January 1, 2021 that pay interest semi-annually on June 30 and December 31. A portion of the bond amortization schedule appears below:

   Date	Cash Paid			Interest Expense			Decrease in Carrying Value			Carrying Value
   01/01/2021										$	5,500,000
   06/30/2021	$	250,000		$	220,000		$	30,000			5,470,000
   12/31/2021		250,000			218,800			31,200			5,438,800

   What is the face amount of the bonds?

   		$5,438,800.
   		$5,470,000.
   		$5,500,000.
   		$5,000,000.

6. Underwater Experiences issues a bond due in 5 years with a stated interest rate of 6% and a face value of $100,000. Interest payments are made semi-annually. The market rate for this type of bond is 5%. What is the issue price of the bond (rounded to nearest whole dollar)? (Use Table 2 and Table 4, contained within a separate file.)

   		$84,557.
   		$104,376.
   		$102,323.
   		$100,000.