11) If a $6,000, 10% , 10-year bond was issued at 104 on October 1, 2011, how much interest will accrue on December 31 if interest payments are made annually?
A) None
B) $104
C) $150
D) $500
E) $105
12) A $10,000 bond issue with a stated rate of interest of 7%, when the market rate of interest is 8%, means that the bond will be sold for:
A) $10,000.
B) $10,800.
C) less than $10,000.
D) the maturity value.
E) $10,700.
13) A $25,000 bond issue with a stated interest rate of 5%, when the market rate of interest is 4%, means that the bond will sell for:
A) $25,000.
B) more than $25,000.
C) $24,000
D) $24,750.
E) $23,750.
14) On October 31, 2011, Isaiah Industries recorded its semi-annual bond interest expense, which contained a credit to discount on bonds payable of $1,200. The adjusting entry on December 31, 2011 will show a credit to discount on bonds payable of:
A) $1,200.
B) $800.
C) $600.
D) $400.
E) $200.
15) Bonds that are backed by collateral are __________ bonds.
16) Debenture bonds are the same as __________ bonds.
17) Bonds that can be exchanged for stock are called __________ bonds.
18) The amount that a borrower must pay back to the bondholders on the maturity date is the __________.
19) The rate of interest that is printed on the bond is called the __________ rate of interest.
20) The rate of interest at which investors are willing to pay for similar bonds of equal risk at the current time is the __________ rate of interest.