Stevens Company Has Had Bonds Payable of $10,000 Outstanding for Several

question 17

Multiple Choice

Stevens Company has had bonds payable of $10,000 outstanding for several years.On January 1,2009,when there was an unamortized discount of $2,000 and a remaining life of 5 years.Its 80% owned subsidiary,Matthews Company,purchased the bonds in the open market for $11,000.The bonds pay 6% interest annually on December 31.The companies use the straight-line method to amortize interest revenue and expense.Compute the consolidated gain or loss on a consolidated income statement for 2009.

• A)$1,000 gain.
• B)$1,000 loss.
• C)$2,000 loss.
• D)$3,000 loss.
• E)$3,000 gain.

Identify the forms and implications of electronic money in financial transactions.

Grasp the legal recovery options available when dealing with forged endorsements and unauthorized check payments.

Understand the concept and legal standing of substitute checks.

Recognize the process of provisional credit and its implications for deposited checks.

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Definitions:

FTC Rule

A regulation established by the Federal Trade Commission (FTC) to protect consumers and maintain competition.

Holder In Due Course

A legal term for someone who has acquired a negotiable instrument in good faith and for value, therefore having certain rights to it free of defenses.

Post-Dating

Writing a future date on a document or check, thereby delaying its effectiveness or negotiability until that date.

Negotiability

The feature of a financial instrument that allows it to be transferred or assigned from one party to another with the legal ownership and benefits passing to the transferee.