Question

18. At the bond issuance date, when issuing a bond at a premium, the carrying value...

18. At the bond issuance date, when issuing a bond at a premium, the carrying value will equal the face amount of the bond.

19. The number of shares outstanding is equal to the number of shares issued by the company minus the number of the company's own shares that it has purchased.

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Answer #1

18 . False

In case of bond issued at premium, the carrying value of bond will always be more than the face value of bond. And premium will be amortised over the bond life. In case of bond issued at discount the carrying value of bond will be less than the bond face value.

Carrying value = face value + unamortised premium

19. True

In case of shares repurchased by company then outstanding shares will be equal to total no of shares issued minus no of shares repurchased. So the given statement is correct.

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