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Indicate Whether Each of the Following Statements About Bonds Is

Question 74

Matching

Indicate whether each of the following statements about bonds is true or false.

Premises:
The carrying value of a bond increases over time if the bond was issued at a premium.
At the end of the term of the bonds,the carrying value of a bond issue is equal to the issue price.
If bonds are sold below face value,the difference between the issue price and the face value is called the bond discount.
The payment of interest is an operating activity on the statement of cash flows.
The issuance of bonds does not appear on the statement of cash flows.
Responses:
False
True

Correct Answer:

The carrying value of a bond increases over time if the bond was issued at a premium.
At the end of the term of the bonds,the carrying value of a bond issue is equal to the issue price.
If bonds are sold below face value,the difference between the issue price and the face value is called the bond discount.
The payment of interest is an operating activity on the statement of cash flows.
The issuance of bonds does not appear on the statement of cash flows.
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