1. Bonds payable are groups of notes payable issued to multiple lenders called bondholders

2. bonds are sold at market price, which is the maximum investors will pay at a given time for a bond.

3. Beta corp. issued $100,000 face value, 10 year 8% bonds on october 1, interest is payable each april 1 and october 1. Accured intrest on december 31 amounts to 2,000

4. the effective rate of intrest is the rate of interest that determines the amount of cash interest the borrowe pays and the investors recieve

5. The journal entry to record selling $200,000 face value bonds at 98 will involve a credit to bonds payable for $196,000

6. When a bond is issued at a discount, the discount has the effect of raising the interest expense on the bonds to the market rate of interest

7. the premium on bonds payable account is amortized by a debit to premium on bonds payable an a credit to interest expense

8. the carrying value of bonds will increase each inerest period if the bonds were sold at a discount

9. The premium on bonds payable balance decreases by the amount of amoritization for the current period

10. Callable bonds give the issuer the benefit of being able to take advantage of low interest rates by paying off bonds whenever it is favorable to do so

11. A capital lease requires the lesse to record both an asset and a lease liablity