Which of the following statements regarding bonds payable is true?
A)Generally, bonds are issued in denominations of $100.
B)When an issuing company's bonds are traded in the "secondary" market, the company will receive part of the proceeds when the bonds are sold from the first purchaser to the second purchaser.
C)A debenture bond is backed by specific assets of the issuing company.
D)The interest rate in the bond contract is called the stated rate.

Question

Quizplus · Accepted Answer

The interest rate in the bond contract is called the stated rate. The other statements are incorrect. Bonds can be issued in various denominations, including amounts greater than $100. The issuing company does not receive any proceeds when its bonds are traded in the secondary market. A debenture bond is not backed by specific assets and is instead backed by the issuer's creditworthiness.

Which of the Following Statements Regarding Bonds Payable Is True