Chapters 14&15

In every corporation, the one class of stock that represents the basic ownership interest is called:

common stock

The interest rate written in the terms of the bond indenture is known as the coupon rate, nominal rate, or stated rate. market rate. yield rate. effective rate.

coupon rate, nominal rate, or stated rate.

The interest rate actually earned by bondholders is called the: nominal rate. stated rate. effective rate. coupon rate.

effective rate.

Bonds for which the owners' names are not registered with the issuing corporation are called:

Bearer bonds

If a long-term note payable has a stated interest rate, that rate should be considered to be the effective rate. True/False

False

The rate of interest actually earned by bondholders is called the Effective, yield, or market rate. True/False

True

Transactions involving the issuance of stock for services or property other than cash should be valued at the fair value of the stock issued. True/False

True

Which of the following is not a typically classified as a long-term liability? Lease Payable. Mortgage Payable. Unearned Revenue. Bonds Payable.

Unearned Revenue.

When a note payable is issued for property, goods, or services, the present value of the note is measured by the fair value of the property, goods, or services. the fair value of the note. using an imputed interest rate to discount all future payments on the note. any of these.

any of these.

Reich, Inc. issued bonds with a maturity amount of $200,000 and a maturity ten years from date of issue. If the bonds were issued at a premium, this indicates that the market and nominal rates coincided. no necessary relationship exists between the two rates. the nominal rate of interest exceeded the market rate. the effective yield or market rate of interest exceeded the stated (nominal) rate.

the nominal rate of interest exceeded the market rate.