true false questions 1 the bonds payable account would be credited for 104 000 to re 4303827

True / False Questions

1.The Bonds Payable account would be credited for $104,000 to record the issuance of $100,000 par value, 10 percent bonds at a market price of 104. 




2.Bonds are often issued as a means of raising capital to pay off short-term debt. 




3.The IRS requires companies to issue couponbonds in order to track taxable interest payments made to the bond holders. 




4.When a corporation pays bond interest, Bond Interest Expense is debited. 




5.Amortizing bond premiums over the period from the issue date to the maturity date reduces bond interest expense shown on the income statement. 




6.Any significant gain or loss from the early retirement of bonds should be shown as an extraordinary gain or loss on the income statement. 




7.Investors will pay an amount greater than the face amount of a bond if the face interest rate on bonds is greater than the market interest rate. 




8.When bonds are issued at a premium, the annual interest expense reported will be greater than the annual cash interest payments. 




9.To systematically accumulate cash for the retirement of bonds at maturity, a corporation may set up a bond sinking fund investment. 




10.A corporation pays only the face value of its bonds if they are retired prior to the maturity date. 





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