Write true or false for statements given below:
1. Bondholders are crditors of the issuing corporation.
2. bondholders claims on the assets of the corporation rank ahead of stockholders
3. the prices of bonds are quoted as a percentage of the bonds' market value
4. when the market rate of interest is less than the contract rate for a bond, the bond will sell for a premium.
5. an equal stream of periodic payments is called an annuity.
6.one reason a dollar today is worth more than a dollar 1 year from today is the time value of money.
7. if the straight-line method of amortization is used, the amount of unamortization premium on bonds payable will decrease as the bonds approach maturity.
8. if the amount of a bond premium on an issued 11% 4-year, $100,000 bond is $12,928, the amiannual straight-line amortization of the premium is $1,416.
9. The issue price of zero-coupon bonds is the present value of their face amount.
10. if sinking fund cash is used to purchase investments, thoseinvestments are reported on the balance sheet as marketable securities.
11. callable bonds can be redeemed by the issuing corporation at the fair market price of the bonds.
12. if bonds of $1,000,000 with unamortized discount if $10,000 are redeemed at 98, the gain on redemption of bonds is $10,000
13. Amortization is the allocation process of writing off bond premiums and discounts to interest expense over the life of the bond issue.
14. the amortization of a premium on bonds payable decreses bond interest expense.
15. the balance in premium on bonds payable should be reported as a deduction from bonds payable on the balance sheet.