Indicate whether each of the following statements about bonds payable is true or false.
_____ a)At the time of issue,the effective interest rate of a particular bond is equal to the market rate of interest for bonds with a similar level of risk.
_____ b)When bonds are sold at 105,the stated interest rate of the bonds is lower than the market rate for investments with a similar level of risk.
_____ c)When bonds are sold at 95,the stated interest rate of the bonds is lower than the market rate for investments with a similar level of risk.
_____ d)When bonds are sold at 100,the stated interest rate of the bonds is lower than the market rate for investments with a similar level of risk.
_____ e)When bonds are sold at 101,the bonds were issued at a premium.

Question

Quizplus · Accepted Answer

The Answer of Indicate whether each of the following statements about bonds payable is true or false.
_____ a)At the time of issue,the effective interest rate of a particular bond is equal to the market rate of interest for bonds with a similar level of risk.
_____ b)When bonds are sold at 105,the stated interest rate of the bonds is lower than the market rate for investments with a similar level of risk.
_____ c)When bonds are sold at 95,the stated interest rate of the bonds is lower than the market rate for investments with a similar level of risk.
_____ d)When bonds are sold at 100,the stated interest rate of the bonds is lower than the market rate for investments with a similar level of risk.
_____ e)When bonds are sold at 101,the bonds were issued at a premium.

Indicate Whether Each of the Following Statements About Bonds Payable