Sub: Accounts Topic: Bond Valuation
Multiple choice questions on Valuation of bonds and stocks
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1. For bonds payable, the cash interest paid in each interest period is:
a. The same amount regardless of whether the bond was sold at par, a discount, or a
b. Different depending upon the date of sale.
c. Not the same amount when the stated (contractual) and yield (effective) interest rates
d. Dependent on the initial amount of accrued interest charged the buyer.
Answer: a. The same amount regardless of whether the bond was sold at par, a discount,
or a premium.
2. If a bond was sold at 10