Question

1*The bonds will be sold for a premium when the market interest rate exceeds its established rate

True

False

2 * The estimated cost of the guarantee should not be reported as a liability, only an explanatory note that makes the information public is required

True

False

3 * Just like the social security tax there is a maximum wage base for the Medicare tax part of the FICA that is 3 times more than the social security tax?

True

False

4 * What factors are important to determine if a pending judgment should be accumulated as a liability and reflected in the financial statements? List at least 3 articles and provide a specific example of when a pending lawsuit would accrue

5 * Determine the price of a bond issue of $ 200,000 under each of the following independent assumptions: (be sure to show all work and label each answer clearly)

1. 10 years of annual interest payment 10% declared rate 12% effective rate
2. 10 years semi-annual payment 10% declared rate 12% effective rate

Answer 1