Principles of Accounting II

Abel Sandoval

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Monday, April 08, 2013

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/ ACC 2013 Sec 02 SP13

/ Quizzes

/ Principles Quiz for Chapter 14

/ Review of attempt 1

Principles Quiz for Chapter 14

Review of attempt 1
Started on

Sunday, 7 April 2013, 08:23 PM

Completed on

Sunday, 7 April 2013, 08:36 PM

Time taken
Grade

12 mins 35 secs
10 out of a maximum of 10 (100%)

Question1
Marks: 1/1

A corporation issues for cash $8,000,000 of 8%, 25-year bonds, interest payable
semiannually. The amount received for the bonds will be
Choose one answer.
a. the present value of $8,000,000 to be repaid in 25 years, less the
present value of 50 semiannual interest payments of $320,000 each.
b. the present value of 50 interest payments of $320,000 each, plus the
present value of $8,000,000 to be repaid in 25 years.
c. the present value of 25 annual interest payments of $640,000 each.
d. the present value of 25 annual interest payments of $640,000 each,
plus the present value of $8,000,000 to be repaid in 25 years.
Correct

Marks for this submission: 1/1.

History of Responses:
#

Action

1 Grade

Response

Time

the present value of 50 interest payments of $320,000

each, plus the present value of $8,000,000 to be repaid

20:25:10 on
7/04/13

Raw
score
1

Grad
e
1

in 25 years.
2 Close&Grad
e

the present value of 50 interest payments of

$320,000 each, plus the present value of $8,000,000
to be repaid in 25 years.

20:36:02 on
7/04/13

Question2
Marks: 1/1

An unsecured bond is the same as a

Choose one answer.
a. term bond.
b. bond indenture.
c. zero coupon bond.
d. debenture bond.
Correct

Marks for this submission: 1/1.

History of Responses:
#

Action

Response

Time

Raw score

Grade

1 Grade

debenture bond.

20:26:26 on 7/04/13

2 Close&Grade

debenture bond.

20:36:02 on 7/04/13

Question3
Marks: 1/1

If $1,000,000 of 8% bonds are issued at 103 1/2, the amount of cash received from the sale
is
Choose one answer.
a. $1,035,000.
b. $1,000,000.
c. $965,000.
d. $1,080,000.
Correct

Marks for this submission: 1/1.

History of Responses:
#

Action

Response

Time

Raw score

Grade

1 Grade

$1,035,000.

20:27:12 on 7/04/13

2 Close&Grade

$1,035,000.

20:36:02 on 7/04/13

Question4
Marks: 1/1

If the market rate of interest is 8%, the price of bonds paying 6% interest semiannually will be
Choose one answer.
a. equal to the face amount of the bonds.

b. less than the face amount of the bonds.

c. greater than or less than the face amount of the bonds, depending on
the term of the bonds.
d. greater than the face amount of the bonds.
Correct

Marks for this submission: 1/1.

History of Responses:
#

Action

1 Grade

Response
less than the face amount of the bonds.

2 Close&Grade less than the face amount of the bonds.

Time

Raw score

Grade

20:28:10 on 7/04/13

20:36:02 on 7/04/13

Question5
Marks: 1/1

If the straight-line method of amortization of bond premium or discount is used, which of the
following statements is true?
Choose one answer.
a. Annual interest expense will increase over the life of the bonds with the
amortization of bond discount.
b. Annual interest expense will decrease over the life of the bonds with the
amortization of bond discount.
c. Annual interest expense will remain the same over the life of the bonds
with the amortization of bond discount.
d. Annual interest expense will increase over the life of the bonds with the
amortization of bond premium.
Correct

Marks for this submission: 1/1.

History of Responses:
#

Action

Response

Time

Raw
score

Grad
e

1 Grade

Annual interest expense will remain the same over the

life of the bonds with the amortization of bond discount.

20:30:10 on
7/04/13

2 Close&Grad
e

Annual interest expense will remain the same over

the life of the bonds with the amortization of bond

20:36:02 on
7/04/13

discount.

Question6
Marks: 1/1

The journal entry a company records for the issuance of bonds when the contract rate is
greater than the market rate would be
Choose one answer.
a. debit Cash, credit Premium on Bonds Payable and Bonds Payable.
b. debit Cash and Discount on Bonds Payable, credit Bonds Payable.
c. debit Cash, credit Bonds Payable.
d. debit Bonds Payable, credit Cash.
Correct

Marks for this submission: 1/1.

History of Responses:
#

Action

Response

Time

Raw
score

Grad
e

1 Grade

debit Cash, credit Premium on Bonds Payable and

Bonds Payable.

20:32:53 on
7/04/13

2 Close&Grad
e

debit Cash, credit Premium on Bonds Payable

and Bonds Payable.

20:36:02 on
7/04/13

Question7
Marks: 1/1

The entry to record the amortization of a premium on bonds payable on an interest payment
date includes
Choose one answer.
a. debit Bonds Payable, credit Interest Expense.
b. debit Premium on Bonds Payable, credit Interest Revenue.
c. debit Interest Expense, debit Premium on Bonds Payable, credit
Cash.
d. debit Interest Expense, credit Premium on Bonds Payable.
Correct

Marks for this submission: 1/1.

History of Responses:
#

Action

1 Grade

Response
debit Interest Expense, debit Premium on Bonds

Time
20:33:38 on

Raw
score
1

Grad
e
1

2 Close&Grad
e

Payable, credit Cash.

7/04/13

debit Interest Expense, debit Premium on Bonds

Payable, credit Cash.

20:36:02 on
7/04/13

Question8
Marks: 1/1

The Marx Company issued $100,000 of 12% bonds on April 1, 2010, at face value. The
bonds pay interest semiannually on January 1 and July 1. The bonds are dated January 1,
2010 and mature on January 1, 2014. The total interest expense related to these bonds for
the year ended December 31, 2010, is
Choose one answer.
a. $12,000.

b. $9,000.
c. $3,000.
d. $1,000.
Correct

Marks for this submission: 1/1.

History of Responses:
#

Action

Response

Time

Raw score

Grade

1 Grade

$9,000.

20:35:06 on 7/04/13

2 Close&Grade

$9,000.

20:36:02 on 7/04/13

Question9
Marks: 1/1

The present value of $30,000 to be received two years from now, at 12% compounded
annually, is (rounded to the nearest dollar)
Choose one answer.
a. $30,000.
b. $37,632.
c. $23,916.
d. $23,700.
Correct

Marks for this submission: 1/1.

History of Responses:
#
1 Grade

Action

Response
$23,916.

Time
20:35:42 on 7/04/13

Raw score
1

Grade
1

2 Close&Grade

$23,916.

20:36:02 on 7/04/13

Question10
Marks: 1/1

When a corporation issues bonds and has the right to repurchase the bonds prior to the
maturity date for a specific price, the bonds are
Choose one answer.
a. unsecured bonds.
b. convertible bonds.
c. debenture bonds.
d. callable bonds.
Correct

Marks for this submission: 1/1.

History of Responses:
#

Action

Response

Time

Raw score

Grade

1 Grade

callable bonds.

20:35:57 on 7/04/13

2 Close&Grade

callable bonds.

20:36:02 on 7/04/13

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