e following statements are correct regarding interest component in the purchase price of bonds? (i) The fair value of a bond purchased cum-interest is the quoted price of the bond on the bond market. (ii) The fair value of a bond purchased cum-interest is the quoted price of the bond on the bond market less interest portion in the bond price (iii) The fair value of a bond purchased cum-interest is the quoted price on the bond market. (iv) The dividend component has no influence in the accounting treatment of the investment in the bonds. Select one: a. (i), (ii) and (iii) only b. (i), (ii), (iii) and (iv)

e following statements are correct regarding interest component in the purchase price of bonds? (i) The fair value of a bond purchased cum-interest is the quoted price of the bond on the bond market. (ii) The fair value of a bond purchased cum-interest is the quoted price of the bond on the bond market less interest portion in the bond price (iii) The fair value of a bond purchased cum-interest is the quoted price on the bond market. (iv) The dividend component has no influence in the accounting treatment of the investment in the bonds. Select one: a. (i), (ii) and (iii) only b. (i), (ii), (iii) and (iv)

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter22: Corporations: Bonds

Section: Chapter Questions

Problem 10RQ: When bonds are redeemed before maturity, how is the gain or loss on redemption determined? Why does...

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Which of the following statements is not correct? a) The export value of the bond; the value the investor pays when buying bonds b) Nominal value of the bond; is the value written on the bond c) Another reason for the difference in bond market prices is the dividend paid to bonds. d) Periodic interest amounts on bonds are calculated at nominal value. e) Market value of a bond is equal to the present value of the interest to be paid by the bond and the principal amount to be paid at the end of maturity. ------------------ What is the market value of İdil Gıda's bond with a nominal value of 15000 USD, maturity of 3 years and 30% annual interest payment, assuming that the desired yield rate is 36%? a) 12500b) 13494c) 9000d) 5456e) 7594 ============ What is the market value of Beril Gıda A.Ş.'s bond with a nominal value of USD 12,000, maturity of 5 years and an annual interest payment of 25%, when the desired rate of return is 25%? a) 18000b) 15000c) 12000d) 16000e)…
Which of the following statements is CORRECT? a. A bond is likely to be called if it sells at a discount below par. b. A bond is likely to be called if it sells at a premium above par c. A bond is likely to be called if its market price is equal to its par value. d. A bond is likely to be called if its market price is below its par value.
Ch 07- Assignment - Bonds and Their Valuation Fixed-income securities consist of debt instruments and preferred stock. Bonds are debt securitie interest rate and principal at a future date. Which of the following types of bonds have the least default risk? O Treasury bonds O Corporate bonds O Municipal bonds Based on the information given in the following statement, answer the questions that follow:
When bonds are redeemed before maturity, how is the gain or loss onredemption determined? Why does the calculation differ for bondsissued at face value, at a premium, and at a discount?
PLEASE KINDLY ANSWER. 26. What is the issue price of the bonds without warrants?27. What is the equity component upon initial recognition?
How do you calculate the price of a bond? It is: The sum of the present value of the face amount and the value of credit default swaps The sum of the future value of annuity of interest and the fair value of its inventory The sum of the present value of annuity of interest and the face amount of the bond The sum of the current value of the issuing corporation of accounts receivables None of the above.
Which of the following is correct? a. The terms, “yield rate”, “ stated rate”, and “market rate” are generally interchangeable when referring to interest on bonds. b. The yield or effective interest rate on a bond is equal to the stated rate if the bond premium or discount is amortized by using the straight-line method. c. Interest revenue and expense related to bonds are always computed using the stated rate of interest. d. If a bond is sold at its face amount, the stated and effective interest rates are the same.
How shall the equity component of a bonds payable issued with share warrants be valued? a.)issue price less the market value of the bonds warrants-on b.)fair value of the share warrants c.)issue price less the market value of the bonds ex-warrants d.)allocation of the issue price basing on the fair value of both bonds and share warrants
. Distinguish between the following values relative to bonds payable: a. Maturity value. b. Face value. c. Market (fair) value. d. Par value.
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