Bonds That Can Be Redeemed at Par at the Option

question 129

Multiple Choice

Bonds that can be redeemed at par at the option of their holders either at specific date after the date of issue and every 1 to 5 years thereafter or when and if the firm takes specified actions such as being acquired, acquiring another company, or issuing a large amount of additional debt are called ________.

• A) zero coupon bonds
• B) junk bonds
• C) floating-rate bonds
• D) putable bonds

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Definitions:

Control Account

An account in the general ledger used to summarize the details of a subservient ledger.

Subsidiary Accounts

Detailed records that support and summarize information in a controlling account, often used for individual items or customers.

Cash Refund

An amount paid by the seller to the buyer for merchandise that is defective, is damaged during shipment, or does not meet the buyer’s expectations.

Cash Payments Journal

The special journal in which all cash payments are recorded.