©THESTAR 2024/2025 ALL RIGHTS RESERVED.
ACC 290 - Chapter 10 Exam Questions And
Answers 100% Guaranteed Pass.
A(n) _________is the issuer's written promise to pay an amount equaling the par value. The par
value is paid at a specified future date. Most often, the issuer is required to make semiannual
interest payments. - Answer✔bond
The legal document identifying the rights and obligations of both the bondholders and the
issuer is called the bond ______. This document describes the number of bonds authorized,
their par value, and the contract interest rate.
article
agreement
document
indenture - Answer✔indenture
Bond market values are expressed as a percentage of their par (face) value. For example, a
company's bonds might be trading at 103, meaning that they can be bought or sold for ____ of
their par value.
103%
0.103%
10.3%
100.3% - Answer✔103%
A company issues $400,000 of 8%, 10-year bonds dated January 1. The bonds pay interest
semiannually on June 30 and December 31 each year. If bonds are sold at par value, the issuer
records the sale with a (debit/credit)________ to Bond Payable in the amount of $._________ -
Answer✔credit 400000
The ________ rate is the interest rate specified in the indenture—sometimes referred to as the
coupon rate, stated rate, or nominal rate.
market
1|Page
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contract
par - Answer✔contract
A bond is its issuer's written promise to pay an amount equaling the _____ value of the bond
with interest.
par
selling
market
carrying - Answer✔par
Forever, Inc. announces an offer to issue bonds with a $100,000 par value, an 8% annual
contract rate (paid semiannually) and a two-year life. The market rate is 10%, so the bonds will
be sold at:
a premium
a discount
present value
term - Answer✔a discount
The legal document that describes the rights and obligations of both the bondholders and the
issuer is called the bond __________ - Answer✔indenture
When the contract rate of the bonds is higher than the market rate, the bond sells at a higher
price than par value. The amount by which the bond price exceeds par value is the _______ on
bonds.
amortization
market
premium
discount - Answer✔premium
Since bond market values are expressed as a percentage of their bond value, a $1,000 bond
that is being sold at 93 would be trading at $__________ - Answer✔930
A company issues $100,000 of 5%, 10-year bonds dated January 1. The bonds pay interest
semiannually on June 30 and December 31 each year. If the bonds are sold at par value, the
issuer records the sale with a debit to in the amount of $. - Answer✔cash 100000
2|Page
ACC 290 - Chapter 10 Exam Questions And
Answers 100% Guaranteed Pass.
A(n) _________is the issuer's written promise to pay an amount equaling the par value. The par
value is paid at a specified future date. Most often, the issuer is required to make semiannual
interest payments. - Answer✔bond
The legal document identifying the rights and obligations of both the bondholders and the
issuer is called the bond ______. This document describes the number of bonds authorized,
their par value, and the contract interest rate.
article
agreement
document
indenture - Answer✔indenture
Bond market values are expressed as a percentage of their par (face) value. For example, a
company's bonds might be trading at 103, meaning that they can be bought or sold for ____ of
their par value.
103%
0.103%
10.3%
100.3% - Answer✔103%
A company issues $400,000 of 8%, 10-year bonds dated January 1. The bonds pay interest
semiannually on June 30 and December 31 each year. If bonds are sold at par value, the issuer
records the sale with a (debit/credit)________ to Bond Payable in the amount of $._________ -
Answer✔credit 400000
The ________ rate is the interest rate specified in the indenture—sometimes referred to as the
coupon rate, stated rate, or nominal rate.
market
1|Page
, ©THESTAR 2024/2025 ALL RIGHTS RESERVED.
contract
par - Answer✔contract
A bond is its issuer's written promise to pay an amount equaling the _____ value of the bond
with interest.
par
selling
market
carrying - Answer✔par
Forever, Inc. announces an offer to issue bonds with a $100,000 par value, an 8% annual
contract rate (paid semiannually) and a two-year life. The market rate is 10%, so the bonds will
be sold at:
a premium
a discount
present value
term - Answer✔a discount
The legal document that describes the rights and obligations of both the bondholders and the
issuer is called the bond __________ - Answer✔indenture
When the contract rate of the bonds is higher than the market rate, the bond sells at a higher
price than par value. The amount by which the bond price exceeds par value is the _______ on
bonds.
amortization
market
premium
discount - Answer✔premium
Since bond market values are expressed as a percentage of their bond value, a $1,000 bond
that is being sold at 93 would be trading at $__________ - Answer✔930
A company issues $100,000 of 5%, 10-year bonds dated January 1. The bonds pay interest
semiannually on June 30 and December 31 each year. If the bonds are sold at par value, the
issuer records the sale with a debit to in the amount of $. - Answer✔cash 100000
2|Page
