1. Faulkner Products has one stock issue in which it sold 10,000 shares to the public at $20 per share. Fill in the following table.
Common shares ($1 par value per share) _____________
Additional paid-in capital _____________
Retained earnings _____________
Net common equity=$450,000
2. The sinking fund provision requires a firm to:
retire a portion of the bond issue each year.
use annual interest payments for the repayment of bonds
gradually reduce the face value of debt to the level of market value of debt
issue bonds every year to finance interest payments on bonds
increase the coupon rate by one percent every year