A company issued a $50,000 7-year bond for $47,565.The bonds pay 9 percent per annum

and the yield-to-maturity at issue was 10 percent.The company uses the effective interest rate method to amortize any discounts or premiums on bonds.After the first year, the yield to maturity on bonds equivalent in risk and maturity to these bonds is 9 percent.The amount of the bond discount amortization ($) recorded in the second year isclosest to:

A.282.

B.348.

C.2,178.

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第1题

On 1 January 2011 the market rate of interest on a company’s bonds is 5% and it issues a bond with the following characteristics:

If the company uses IFRS, its interest expense (in millions) in 2011 is closest to:

A.€1.846.

B.€2.307.

C.€2.386.

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第2题

Which of the following is most likely a benefit of debt covenants for the borrower?

A.Reduction in the cost of borrowing.

B.Limitations on the company’s ability to pay dividends.

C.Restrictions on how the borrowed money may be invested.

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第3题

A capital lease requires annual lease payments of $2,000 at the start of each year.Fair value of the leased equipment at inception of the lease is $10,000 and the implicit interest rate is 12 percent.If the present value of the lease payments equals the fair value of the equipment at the inception of the lease, the interest expense (in $) recorded by the lessee in the second year of the lease is closest to:

A.960.

B.1,104.

C.1,200.

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第4题

Which of the following is most likely a reason that a lessor can offer attractive lease terms and lower cost financing to a lessee? Because the:

A.Lessor retains the tax benefits of ownership.

B.Lessor avoids reporting the liability on its balance sheet.

C.Lessee is better able to resell the asset at the end of the lease.

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