Answer the following statements true (T) or false (F)
1. A mortgage is a special type of long-term note payable.
2. A mortgage is a secured note because the building will serve as collateral.
3. A person or business who pays another party for the use of an asset is a lessee.
4. A $5,000 bond quoted at 104.4 will cost $5,220.
5. Allied Inc. issued $15,000 of 5% bonds payable when the market rate was 7%; therefore, they will sell them for more than $15,000.
1. TRUE
2. TRUE
3. TRUE
4. TRUE
Explanation: bond amount × quoted rate = cost; ex: $5,000 × 1.044 = $5,220
5. FALSE
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