Accounting Questions

timer Asked: May 11th, 2015

Question description


Baldwin Company issued a five year interest bearing note payable for $25,000 on January 1, 2000. Each January the company is required to pay $5,000 on the note. How will this note be reported on the December 31,2001 balance sheet?

A.) Long-term debt $25,000

B.) Long-term debt $20,000

c.) Long term debt $15,000 Long term debt due within one year, $5,000

D.) Long-term debt of $20,000; Long term debt due within one year, $5,000.


Secured bonds are bonds that

a.) are in possession of a bank.

b.) are registered in the same name of the owner

c.) have specific assets of the issuer pledged as collateral.

d.) have detachable interest coupons


A legal document which summarizes the rights and privileges of bondholders as well as the obligations and commitments of the issuing company is called

a.) a bond indenture

b.) a bond debenture

c.) trading on equity

d.) a term bond


Stockholders of a company may be reluctant to finance expansions through issuing more equity because

a.) leveraging with debt is always a better idea

b.) their earnings per share may decrease

d.) dividends must be paid on a periodic basis


Bonds that are secured by real estate are termed

a.) mortgage bonds

b.) serial bonds

c.) debentures

d.) bearer bonds


Bonds that are mature at a single specified future are called

a.) coupon bonds

b.) term bonds

c.) serial bonds

d.) debentures


Bonds that may be exchanged for common stock at athe option of the bondholders are called

a.) options

b.) stock bonds

c.) convertible bonds

d.) callable bonds

14.) Bonds that are subject to retirement at a stated sollar ammount prior to maturity at the option of the issuer are called

a.) callable bonds

b.) early retirement bonds

c.) options

c.) options

d.) debentures

15.) investors who receive checks in their names for interest earned on bonds must hold

a.) registered bonds

b.) coupon bonds

c.) bearer bonds

d.) direct bonds

16.) bonds that may be directed to anothe party by delivery are

a.) coupon bonds

b.) debentures

c.) registered bonds d.) transportable bonds

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