Bonds Payable Part 2

Question 1

A bond that matures in installments is called a?

Answer 1

Serial Bond

Question 2

Bonds which do not pay interest unless the issuing company is profitable are called?

Answer 2

Income Bonds

Question 3

The printing costs and legal fees associated with the issuance of a bond payable should?

Answer 3

Be reported as a reduction to the issue amount of the bond payable and then amortized to expense over the life of the bond

Question 4

When a bond sells at a premium, interest expense will be?

Answer 4

Less than the bond interest payment