CH. 10 - Bonds & Present Value Tables Flashcards
1
Q
______________________ is incurred based on the entire amount of time bonds were outstanding during the year regardless of when the interest payments are made.
A
Bond interest expense
2
Q
_____________ mature in installments.
A
Serial Bonds
3
Q
What are Bonds Issues Cost?
A
Accounting and Legal Fees, Commissions, Printing, and Underwriting
4
Q
Under IFRS, it requires financial liability to be reported at _________________.
A
Amortized Cost.
5
Q
What is the Interest Expense formula?
A
Market Rate x Carrying Value
6
Q
Price of the Bond is composed of 2 parts discount market rate:
A
1) Present Value of Future Payments + 2) Present Value of the Face Value = Price of the Bond
7
Q
What is the difference between Discount, Par, and Premium?
A
Discount = Market Rate is Greater than Stated rate Par = Market is Same as Stated rate Premium = Market is Less than Stated rate
