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Match the Items Below by Entering the Appropriate Code Letter

Question 309

Matching

Match the items below by entering the appropriate code letter in the space provided.

Premises:
Produces a periodic interest expense that is the same amount each interest period.
A legal document that sets forth the terms of a bond issue.
Occurs when the contractual interest rate is less than the market interest rate.
A measure of a company's liquidity
Occurs when the contractual interest rate is greater than the market interest rate.
A form of interest-bearing notes payable used by corporations.
A solvency measure that indicates the percentage of assets provided by creditors.
Unsecured bonds issued against the general credit of the borrower.
A debt that can reasonably be expected to be paid from current assets.
Produces a periodic interest expense equal to a constant percentage of the carrying value of the bonds.
Responses:
Current ratio
Straight-line method of amortization
Bond indenture
Debt to assets ratio
Effective-interest method of amortization
Bonds
Debenture bonds
Current liability
Premium on bonds payable
Discount on bonds payable

Correct Answer:

Produces a periodic interest expense that is the same amount each interest period.
A legal document that sets forth the terms of a bond issue.
Occurs when the contractual interest rate is less than the market interest rate.
A measure of a company's liquidity
Occurs when the contractual interest rate is greater than the market interest rate.
A form of interest-bearing notes payable used by corporations.
A solvency measure that indicates the percentage of assets provided by creditors.
Unsecured bonds issued against the general credit of the borrower.
A debt that can reasonably be expected to be paid from current assets.
Produces a periodic interest expense equal to a constant percentage of the carrying value of the bonds.
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