Bonds are often issued by a corporation to help finance an expensive asset. Bonds are part of the corporation's debt and will usually be reported as a long-term liability.

Use our tests - crossword puzzles with answers to check your understanding of many accounting concepts.

Sample Bonds Payable Questions

1) An increase in the market interest rates for bonds will cause the selling price of an existing bond to __________ (decrease, increase).

2) A long-term asset that is restricted for retiring bonds payable when they mature is a bond __________ fund.

3) Bonds without specific _________________ are unsecured bonds known as debentures.

4) When the premium on bonds payable is _______________ by the issuer, the carrying value of the bonds will decrease.

5) Bonds that mature on a single date are referred to as _______ bonds.

6) If an 8% bond is offered in a market that demands 7.9% interest, the amount received by the issuer will be ________ (less, more) than its face amount.

7) If the issue price of a new bond (excluding any accrued interest) is less than the bond's face amount, the difference is recorded as ______________ on Bonds Payable.

8) The effective interest rate method results in a correlation between a bond's interest expense and its carrying or __________ value.

9) The proceeds of a 9% $400,000 bond issued at 101 will be four hundred _______ thousand dollars plus accrued interest.

10) A bond maturing in three years will be reported on the issuer's balance sheet as a long-term _____________.

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