# Phys 102 Homework 9: Brief Exercises 10-1 and 10-2; Exercises 10-10, 11-2, 11-14, and 11-18

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I. Brief Exercise 10-1 Classification of Long-Term Liabilities Which of the following would be included in the Long-Term Liability category of the balance sheet? Accounts Payable Bonds Payable Accrues Expenses Current Maturities of Long-Term Debt Accrued Income Taxes Answer: Bonds Payable II. Brief Exercise 10-2 Bond Features Define the following terms relates to bonds payable. Debenture bonds Face Value of bond Secured bonds Face rate of Interest Convertible bond Issue price Callable bond 1. Debentures bonds- is debt instrument that is not secured by physical assets or collateral. Debentures bonds backed by the general credit of the company. 2. Secured bonds - is secured by a specific collateral of the company. 3. Convertible bond- or convertible note is a bond that can convert into a specified number of shares of common stock. 4. Callable bond- bonds which can be redeemed at the option of the issuing company before the bond reaches its date of maturity. 5. Face Value- The nominal value or dollar value of a security stated by the issuer. the maturity amount of the bonds as indicated on the face of the bond contract 6. Face rate of Interest- or coupon, the amount of interest that will be paid on the bonds as indicated in the bond contract during the time between when the bond is issued and when it matures. 7. Issue Price- the amount of money the issuing company will receive at the time the bonds are issued. This amount represents the present value of the cash flows the bond will produce. III. Exercise 10-10 Impact of Transactions Involving Bonds on Statement of Cash Flows In the following list, identify each item as operating (O), Investing (I), financing (F) or not separately reported on the statement of cash flow (N). F—Proceeds from issuance of bonds payable O—Interest expense F—Redemption