Match These Terms with Their Definitions

question 89

Multiple Choice

Match these terms with their definitions.
-the rate found in the debt contract that determines the amount of the interest payment

• A)bond
• B)contract, coupon, stated rate
• C)discount
• D)effective interest rate method
• E)face value, par value, principal
• F)interest amortization
• G)lease
• H)lessee
• I)lessor
• J)leverage
• K)long-term debt
• L)market rate, yield
• M)maturity
• N)premium
• O)straight-line method

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Definitions:

Defined Benefit Pension Plan

A retirement plan where the benefits that an employee will receive upon retirement are defined based on a formula considering factors such as salary history and duration of employment.

Service Cost

The portion of the pension expense that is recognized for the increase in pension benefits related to employee services of the current period.

Unrecognized Prior Service Cost

Costs not immediately recognized on the income statement related to retroactive benefits granted to employees in a pension plan amendment.

Straight-Line Method

A depreciation method that allocates an equal amount of depreciation each year over the useful life of the asset.