Quiz 10: Reporting and Interpreting Bond Securities
When a Company Purchases and Retires Its Outstanding Bonds Payable
When a company purchases and retires its outstanding bonds payable for an amount less than their book value,a decrease in stockholders' equity results.
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Issues of bonds in exchange for cash are reported as a cash flow from financing activities on the statement of cash flows.
The cash payment for interest on a bond payable is reported as a cash flow from financing activities on the statement of cash flows.
When a company prepares a bond indenture,certain provisions of the bonds are included.Which of the following is not specified in the indenture? A)Date of each interest payment. B)The coupon interest rate. C)The maturity date. D)The market rate of interest.
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