ACC 202 i need help on my homework?

1.


A corporation issues $400,000 of 10%, 5-year bonds at 97. What will be the total interest expense over the life of the bonds?


A) $188,000


B) $212,000


C) $400,000


D) $200,000


2.


Which of the following is an advantage of issuing bonds rather than issuing stock?


A) Issuing bonds generally results in lower earnings per share.


B) Interest expense is tax deductible.


C) Issuing bonds is more risky to the issuing corporation.


D) Issuing bonds dilutes control of the corporation.


3.


Which of the following statements is true?


A) The premium on bonds payable account is subtracted from the bonds payable account on the balance sheet.


B) The cash proceeds received upon issuance of bonds may exceed the par value of the bonds.


C) The amortization of bond premium increases interest expense.


D) All of the above are true.


4.


Which of the following is the definition of secured bonds?


A) Borrower's promises to transfer the legal title to certain assets to the lender if the debt is not paid on schedule.


B) Bonds that mature in installments over a period of time.


C) Unsecured bonds backed only by the good faith of the borrower.


D) Bonds that all mature at the same time for a particular issue.


5.


A company issues two thousand $1,000 bonds at 102. Which of the following is the entry to record this transaction?


A) Cash 2,000,000


Premium on bonds payable 40,000


Bonds Payable 2,040,000


B) Cash 2,040,000


Premium on bonds payable 40,000


Bonds Payable 2,000,000


C) Cash 2,040,000


Discount on bonds payable 40,000


Bonds Payable 2,000,000


D) Cash 2,040,000


Bonds Payable 2,040,000


6.


A discount on a bond payable is the excess of the bond's issue price over its maturity value.


A) True


B) False


7.


The maturity value of a bond payable is the sum of the interest payments and the principle amount of the note.


A) True


B) False


8.


Debentures are unsecured bonds backed only by the good faith of the borrower.


A) True


B) False


9.


The entry to record a call of bonds payable generally includes a gain or loss on the retirement of bonds payable.


A) True


B) False


10.


Generally accepted accounting principles require that interest expense be measured using the effective-interest method unless the straight-line amounts are similar.


A) True


B) False|||Call is In Poker, to match the current bet.