Question Details

The carrying value of bonds will equal the market price 



1.	The following exhibit is for Kmart bonds.
		Bonds		Close	Yield	Volume	Net Change
	Kmart 8 3/8    17	100¼	8.4	35	+7/8

The contractual interest rate of the K mart bonds is

2.	The following exhibit is for Kmart bonds.
		Bonds		Close	Yield	Volume	Net Change
	Kmart 8 3/8    17	100¼	8.4	35	+7/8

On the day of trading referred to above,

3.	A ¥1,000,000 face value bond with a quoted price of 97 is selling for

4.	A bond with a face value of ¥200,000,000 and a quoted price of 102¼ has a selling price of


5.	If the market interest rate is greater than the contractual interest rate, bonds will sell

6.	The total cost of borrowing is increased only if the

7.	If the market interest rate is 10%, a $10,000, 12%, 10-year bond, that pays interest semiannually would sell at an amount

8.	The present value of a $10,000, 5-year bond, will be less than $10,000 if the

9.	Gomez Corporation issues 2,000, 10-year, 8%, $1,000 bonds dated January 1, 2011, at 98. The journal entry to record the issuance will show a


	10.	The market interest rate is often called the

	11.	If bonds are issued at a discount, it means that the

12.	The statement that "Bond prices vary inversely with changes in the market interest rate" means that if the
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	13.	The carrying value of bonds will equal the market price 

	14.	The sale of bonds above face value 

15.	Bond interest paid is

	16.	Mendez Corporation issues 3,000, 10-year, 8%, $1,000 bonds dated January 1, 2011, at 103. The journal entry to record the issuance will show a

	17.	Herman Company received proceeds of ₤188,500 on 10-year, 8% bonds issued on January 1, 2011. The bonds had a face value of ₤200,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Herman uses the straight-line method of amortization.
What is the amount of interest Herman must pay the bondholders in 2011?

18.	In the statement of financial position, the account Bond Interest Payable is 

19.	A bond with a face value of TL10,000,000 and a quoted price of 102¼ has a selling price of 

20.	A bond with a face value of TL10,000,000 and a quoted price of 97½ has a selling price of 





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