21. Bond interest paid by a corporation is an expense, whereas dividends paid are not an expense of the corporation.
22. Registered bonds are bonds that are delivered to owners by U.S. registered mail service.
23. A debenture bond is an unsecured bond which is issued against the general credit of the borrower.
24. Neither corporate bond interest nor dividends are deductible for tax purposes.
25. A 10% stock dividend is the equivalent of a $1,000 par value bond paying annual interest of 10%.
26. The board of directors may authorize more bonds than are issued.
27. The contractual interest rate is always equal to the market interest rate on the date that bonds are issued.
28. If $150,000 face value bonds are issued at 103, the proceeds received will be $103,000.
29. Discount on bonds is an additional cost of borrowing and should be recorded as interest expense over the life of the bonds.
30. If a corporation issued bonds at an amount less than face value, it indicates that the corporation has a weak credit rating.