Question

========Stock options and warrants affect the diluted EPS calculation by changing the​ ________.

======Before computing the gain or loss on the early extinguishment of bonds​ payable, the company must amortize any discount or premium up to the retirement date. true or false

====When bonds are issued at​ par, the market rate is equal to the stated rate. true or false

======Bonds that do not pay cash interest are referred to as zero-coupon bonds. true or false

=====​______ preferred stock shares allow the shareholder to convert his shares to common shares at a predetermined rate or exchange ratio.

=======The initial journal entry to record an equity-classified award of stock options increases​ stockholders' equity on the balance sheet. true or false

=======For lessors of sales-type ​leases, cost of goods sold is equal to the carrying value of the leased asset less the present value of any unguaranteed residual asset plus any deferred initial direct costs paid by the lessor. true or false

===After identifying a​ lease, both the lessee and the lessor are required to separate the various lease and nonlease components and allocate consideration to these components. true or false

==Preferred shares are generally voting and pay a fixed dividend. true or false

Answer 1

Answer: Stock options and warrants affect the diluted EPS calculation by changing the​ by changing the number of shares outstanding and and net income.

Question: Before computing the gain or loss on the early extinguishment of bonds​ payable, the company must amortize any discount or premium up to the retirement date.

Answer: Yes this is true.

Example:

Company L had issued $100,000 worth of bonds 2 years ago at a discount of $5,000. The current balance in the discount on bonds payable account is $4,000. The company intends to redeem the bonds for $98,000.

Carrying amount of a bond payable equals the face value of the bond less any discount or plus any premium. In this scenario the face value is $100,000 and the outstanding balance of discount on bonds payable is $4,000 which gives us a carrying amount of $96,000. Since the cash paid to redeem the bonds is $98,000 which exceeds the carrying amount of $96,000 by $2,000 the company needs to record loss of retirement of bonds of $2,000 as follows:

Bonds payable	100,000
Loss on retirement of bonds	2,000
Cash		98,000
Discount of bonds		4,000

Example: gain on retirement of bonds

Company G had issued $100,000 worth of bonds 2 years ago at a premium of $6,000. The current balance in the discount on bonds payable account is $5,000. The company intends to redeem the bonds for $102,000.

Carrying amount of a bond payable equals the face value of the bond less any discount or plus any premium. In this scenario the face value is $100,000 and the outstanding balance of premium on bonds payable is $5,000 which gives us a carrying amount of $105,000 ($100,000 plus $5,000). The cash paid to redeem the bonds is $102,000 which is lower than the carrying amount of $105,000. Company G should record a gain on early retirement of bonds of $3,000 because it was able to settle a liability for less than its carrying amount.

Bonds payable	100,000
Premium on bonds	5,000
Cash		102,000
Gain on retirement of bonds		3,000

Question:When bonds are issued at​ par, the market rate is equal to the stated rate. true or false

Answer: Yes this is true.

Bonds can be issued at par, which means that the price at which one unit of the bond is being sold is same as the face value.

Due to changing interest rates, financial instruments almost never trade exactly at par. A bond is not likely to trade at par when interest rates are above or below its coupon rate.

Question:Bonds that do not pay cash interest are referred to as zero-coupon bonds. true or false

Answer: Yes this is true.

A zero-coupon bond is a bond that pays no interest and trades at a discount to its face value. It is also called a pure discount bond or deep discount bond.

Question: preferred stock shares allow the shareholder to convert his shares to common shares at a predetermined rate or exchange ratio.

Answer: Convertible preferred shares can be converted into common stock at a fixed conversion ratio.

Once the market price of the company's common stock rises above the conversion price, it may be worthwhile for the preferred shareholders to covert and realize an immediate profit.

Question:The initial journal entry to record an equity-classified award of stock options increases​ stockholders' equity on the balance sheet. true or false

Answer: the answer would be, false

Question: Preferred shares are generally voting and pay a fixed dividend. true or false

Answer: preferred shares do not give voting rights but do have fixed dividends.

So answer is , false