Chapter 14

CHAPTER 14

LONG-TERM LIABILITIES

IFRS questions are available at the end of this chapter.

TRUe-FALSe—Conceptual

Answer No. Description

T 1. Bond interest payments.

F 2. Debenture bonds.

T 3. Definition of serial bonds.

F 4. Market rate vs. coupon rate.

F 5. Definition of stated interest rate.

T 6. Stated rate and coupon rate.

F 7. Amortization of premium and discount.

F 8. Issuance of bonds.

F 9. Interest paid vs. interest expense.

T 10. Accounting for bond issue costs.

T 11. Refunding of bond issue.

F 12. Long-term notes payable.

T 13. Implicit interest rate.

T 14. Imputation and imputed interest rate.

T 15. Off-balance-sheet financing.

T 16. Debt to total assets ratio.

F 17. Refinancing long-term debt.

F 18. Times interest earned ratio.

F *19. Loss recognized on impaired loan.

F *20. Gain/loss in troubled debt restructuring.

Multiple Choice—Conceptual

Answer No. Description

a 21. Liability identification.

a 22. Bond terms.

b 23. Definition of "debenture bonds."

a P24. Definition of bearer bonds.

d S25. Definition of income bonds.

a S26. Effective-interest vs. straight-line method.

d S27. Interest rate of the bond indenture.

d 28. Rate of interest earned by the bondholders.

d 29. Calculating the issue price of bonds.

d 30. Calculating the issue price of bonds.

b 31. Premium and interest rates.

a 32. Interest and discount amortization.

d 33. Effective-interest amortization method.

d 34. Impact of effective-interest method.

c 35. Recording bonds issued between interest dates.

d 36. Bonds issued at other than an interest date.

d 37. Classification of bond issuance costs.

c 38. Bond issuance costs.

Multiple Choice—Conceptual (cont.)

Answer No. Description

b 39. Classification of treasury bonds.

d 40. Early extinguishment of bonds payable.

d 41. Gain or loss on extinguishment of debt.

c P42. In-substance defeasance.

c P43. Reporting long-term debt.

a...