41. Generally, convertible bonds do not pay interest.
42. Each payment on a mortgage note payable consists of interest on the original balance of the loan and a reduction of the loan principal.
43. A long-term note that pledges title to specific property as security for a loan is known as a mortgage payable.
44. The times interest earned ratio is computed by dividing net income by interest expense.
a 45.The present value of a bond is a function of two variables: (1) the payment amounts and (2) the interest (discount) rate.
a
46.The effective-interest method of amortization results in varying amounts of amortization and interest expense per period but a constant interest rate.
47. A debt that is expected to be paid within one year through the creation of long-term debt is a current liability.
48. Notes payable usually are issued to meet long-term financing needs.
49. Current maturities of long-term debt are often identified as long-term debt due within one year on the balance sheet.
50. Bonds that mature at a single specified future date are called term bonds.