x
Info
x
Warning
x
Danger
 / 
 / 
 / 
61.              When the present value of a bond issue calculated,

Question : 61.              When the present value of a bond issue calculated, : 1411002

 

 

61.              When the present value of a bond issue is calculated, both the present value of a single sum table and the present value of an annuity table must be used.

 

 

62.              If a 20-year bond pays interest of 8 percent semiannually, the present value of the bond is calculated based upon 4 percent and 40 periods.

 

 

63.              The present value of a bond is always less than the face value of the bond.

 

 

64.              The carrying value of a bond is also referred to as its present value.

 

 

65.              Issuing bonds at a discount has the effect of decreasing interest expense below the face amount of interest.

 

 

66.              Total interest cost for a bond issued at a premium equals the total of the periodic interest payments minus the premium.

 

 

67.              The market interest rate is the rate that an issuer of bonds actually will have to bear and that an investor (purchaser) actually will earn over the bond's life.

 

 

68.              Under the effective interest method of amortizing a bond discount, the bond interest expense recorded for each period increases over the life of the bond.

 

 

69.              When the effective interest method of amortization is used for a bond premium, the amount of premium to be amortized for a period is calculated by subtracting the amount of bond interest expense for the period from the amount of cash to be paid for interest for the same period.

 

 

70.              The carrying value of a bond issued at a premium is calculated at any given point in time by deducting the balance of the unamortized premium from the bond's face value.

 

 

 

Solution
5 (1 Ratings )

Solved
Finance 1 Year Ago 32 Views
This Question has Been Answered!
Unlimited Access Free
Explore More than 2 Million+
  • Textbook Solutions
  • Flashcards
  • Homework Answers
  • Documents
Signup for Instant Access!
Ask an Expert
Our Experts can answer your tough homework and study questions
275782 Finance Questions Answered!
Post a Question