The Balance in the Bonds Payable Account Is a Credit

question 151

Multiple Choice

The balance in the Bonds payable account is a credit of $50,000.The balance in the Premium on bonds payable account is a credit of $900.How much is the bond carrying amount?

• A) $900
• B) $50,900
• C) $51,900
• D) $49,100

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Definitions:

Expected Rate of Return

The anticipated yield or gain that an investor expects to earn on an investment, based on past or projected future performance.

Premium

The amount by which the price of something, especially a financial asset, exceeds its nominal or face value.

Strike Price

The fixed price at which the holder of an option can buy (in the case of a call) or sell (in the case of a put) the underlying security or commodity.

Stock Price

The cost of purchasing a share of a company's stock, representing ownership in the company and a claim on part of its assets and profits.