The differences in rates among these issues were most probably caused primarily by:

As the bond discount is amortized, the carrying value of the bonds will increase. True False As the bond premium is amortized, the carrying value of the bonds will decrease. True False When bonds that were initially issued at a discount are redeemed at maturity, the journal entry requires a ) debit to Bonds Payable, debit to Discount on Bonds Payable, and a credit to Cash ) debit to Bonds Payable, credit to Discount on Bonds Payable, and a credit to Cash O debit to Cash, credit to Bonds Payable and a credit to Discount on Bonds Payable ) debit to Bonds Payable and a credit to Cash When bonds that were initially issued at a premium are redeemed at maturity, the journal entry requires a ) debit to Bonds Payable and a credit to Cash O debit to Bonds Payable, credit to Premium on Bonds Payable, and a credit to Cash O debit to Bonds Payable, debit to Premium on Bonds Payable, and a credit to Cash O debit to Cash, credit to Bonds Payable and a credit to Premium on Bonds Payable When bonds…

Corporate bonds that receive a ____ rating from credit rating agencies are normally placed at ____ yields.   A higher; lower B higher; higher C lower; lower D lower; higher

57. Which of the following statements is incorrect about bonds? In all ofthe statements, assume other things are held constant.a. Price sensitivity, that is, the change in price due to a given changein the required rate of return, increases as a bond’s maturityincreases.b. For a given bond of any maturity, a given percentage point increasein the interest rate (kd) causes a larger dollar capital loss thanthe capital gain stemming from an identical decrease in the interestrate.c. For any given maturity, a given percentage point increase in theinterest rate causes a smaller dollar capital loss than the capitalgain stemming from an identical decrease in the interest rate.d. From a borrower’s point of view, interest paid on bonds is taxdeductible.e. A 20-year zero coupon bond has less reinvestment rate risk than a 20-year coupon bond.