Gerencia

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 ofthe 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.
aS44. Debt instrument exchanged for property.
d 45. Valuation of note issued in noncash transaction.
d 46. Stated interest rate of note.
c 47. Accounting for discount on notes payable.
d 48. Off-balance-sheet financing.
c S49. Off-balance-sheet financing.
d S50. Long-term debt maturing within one year.
d 51. Required bond disclosures.
d 52. Long-term debt disclosures.
c 53. Timesinterest earned ratio.
c. 54. Debt to total assets ratio.
c *55. Modification of terms in debt restructure.
d *56. Gain/loss on troubled debt restructuring.
b *57. Gain/loss on troubled debt restructuring.
b *58. Interest and troubled debt restructuring.
c *59. Creditor's calculations for modification of terms.

P These questions also appear in the Problem-Solving Survival Guide.
SThese questions also appear in the Study Guide.
* This topic is dealt with in an Appendix to the chapter.


Multiple Choice—Computational

Answer No. Description

a 60. Calculate the present value of bond principal.
b 61. Calculate the present value of bond interest.
a 62. Determine the issue price of bonds.
c 63. Proceeds from bond issuance.
c 64. Bonds issued between interestdates.
c 65. Proceeds from bond issuance.
c 66. Bonds issued between interest dates.
c 67. Effective-interest method interest expense.
a 68. Effective-interest method carrying value.
d 69. Straight-line method carrying value.
d 70. Straight-line amortization/interest expense.
c 71. Effective-interest method interest expense.
a 72. Effective-interest method carrying value.
d 73.Straight-line method carrying value.
d 74. Straight-line method amortization/interest expense.
b 75. Interest expense using effective-interest method.
c 76. Interest expense using effective-interest method.
d 77. Entry to record issuance of bonds.
a 78. Calculate bond interest expense.
Multiple Choice—Computational (cont.)

Answer No. Description

b 79. Entry to record issuance of...