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71 investments in bonds that management intends to hold to maturity are called held 4296855


71. Investments in bonds that management intends to hold to maturity are called held-to-maturity securities. 

72. Investment in Bonds are reported on the balance sheet at lower of cost or market. 

73. Investment in Bonds is listed on the balance sheet after Bonds Payable. 

74. The higher the times interest earned ratio, the better the debtors' protection. 

75. The times interest earned ratio is calculated by dividing Bonds Payable by Interest Expense. 

76. When the effective interest method of amortization is used, the amount of interest expense for a given period is calculated by multiplying the face rate of interest by the bond’s carrying value at the beginning of the given period. 

77. The effective interest method produces a constant dollar amount of interest expense to be reported each interest period. 

78. When there are material differences between the results of using the straight-line method and using the effective interest method of amortization, the effective interest method should be used. 

79. When a corporation issues bonds, the price that buyers are willing to pay for the bonds does not depend on which of the following below 
A. face value of the bonds
B. market rate of interest
C. periodic interest to be paid on the bonds
D. denominations the bonds are sold

80. A corporation would not be successfully trading on equity if it gathered funds by 
A. issuing common stock
B. issuing preferred stock
C. issuing notes
D. issuing bonds


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