Question 1

A note payable must always be paid before an account payable.

Accepted Answer

A) True 
 B)False

Question 2

Discount on Bonds Payable is ________________ (from)(to) bonds payable on the balance sheet. Premium on Bonds Payable is ________________ (from)(to) bonds payable on the balance sheet.

Accepted Answer

The answer of Discount on Bonds Payable is ________________ (from)(to)...

Question 3

Each payment on a mortgage note payable consists of

Accepted Answer

A)  interest on the original balance of the loan only. 
B)  reduction of loan principal only. 
C)  interest on the original balance of the loan and reduction of loan principal. 
D)  interest on the unpaid balance of the loan and reduction of loan principal. 
A)  interest on the original balance of the loan only. 
B)  reduction of loan principal only. 
C)  interest on the original balance of the loan and reduction of loan principal. 
D)  interest on the unpaid balance of the loan and reduction of loan principal.

Question 4

Based on the following information, compute the (1) current ratio and (2) working capital.

Accepted Answer

The answer of Based on the following information, compute the...

Question 5

Presented here is a partial amortization schedule for Roseland Company who sold $300,000, five year 10% bonds on January 1, 2017 for $318,000 and uses annual straight-line amortization.   Which of the following amounts should be shown in cell (iii)?

Accepted Answer

A)  $9,000. 
B)  $18,000. 
C)  $3,600. 
D)  $1,800. 
A)  $9,000. 
B)  $18,000. 
C)  $3,600. 
D)  $1,800.

Question 6

Presented here is a partial amortization schedule for Roseland Company who sold $300,000, five year 10% bonds on January 1, 2017 for $312,000 and uses annual straight-line amortization.   Which of the following amounts should be shown in cell (i)?

Accepted Answer

A)  $31,200 
B)  $32,400 
C)  $30,000 
D)  $6,000 
A)  $31,200 
B)  $32,400 
C)  $30,000 
D)  $6,000

Question 7

A $30,000, 8%, 9-month note payable requires an interest payment of $1,800 at maturity.

Accepted Answer

A) True 
 B)False

Question 8

When authorizing bonds to be issued, the board of directors does not specify the

Accepted Answer

A)  total number of bonds authorized to be sold. 
B)  contractual interest rate. 
C)  selling price. 
D)  total face value of the bonds. 
A)  total number of bonds authorized to be sold. 
B)  contractual interest rate. 
C)  selling price. 
D)  total face value of the bonds.

Question 9

The holder of a convertible bond can convert an interest payment received into a cash dividend paid on common stock if the dividend is greater than the interest payment.

Accepted Answer

A) True 
 B)False

Question 10

Korean Corporation issued $2 million, 10-year, 6% bonds on January 1, 2018.
Instructions
Prepare the entry to record the sale of these bonds, assuming they were issued at
(a) 98.
(b) 103.

Accepted Answer

The answer of Korean Corporation issued $2 million, 10-year, 6%...

Question 11

The terms of a bond issue are set forth in a formal legal document called a bond ________________.

Accepted Answer

The answer of The terms of a bond issue are...

Question 12

Employee payroll deductions include each of the following except

Accepted Answer

A)  federal unemployment taxes. 
B)  federal income taxes. 
C)  FICA taxes. 
D)  insurance and pensions. 
A)  federal unemployment taxes. 
B)  federal income taxes. 
C)  FICA taxes. 
D)  insurance and pensions.

Question 13

A mortgage note payable with a fixed interest rate requires the borrower to make installment payments over the term of the loan. Each installment payment includes interest on the unpaid balance of the loan and a payment on the principal. With each installment payment, indicate the effect on the portion allocated to interest expense and the portion allocated to principal.

Accepted Answer

The answer of A mortgage note payable with a fixed...

Question 14

Farris Company borrowed $800,000 from BankTwo on January 1, 2017 in order to expand its mining capabilities. The five-year note required annual payments of $208,349 and carried an annual interest rate of 8.5%. What is the amount of expense Farris must recognize on its 2018 income statement?

Accepted Answer

A)  $68,000. 
B)  $56,070. 
C)  $43,127. 
D)  $50,290. 
A)  $68,000. 
B)  $56,070. 
C)  $43,127. 
D)  $50,290.

Question 15

A 10% stock dividend is the equivalent of a $1,000 par value bond paying annual interest of 10%.

Accepted Answer

A) True 
 B)False

Question 16

On September 1, Joe's Painting Service borrows $150,000 from National Bank on a 4-month, $150,000, 6% note. The entry by Joe's Painting Service to record payment of the note and accrued interest on January 1 is

Accepted Answer

The answer of On September 1, Joe's Painting Service borrows...

Question 17

Gains and losses are not recognized when convertible bonds are converted into common stock.

Accepted Answer

A) True 
 B)False

Question 18

English Company billed its customers a total of $1,785,000 for the month of November. The total includes a 5% state sales tax.
Instructions
(a) Determine the proper amount of revenue to report for the month.
(b) Prepare the general journal entry to record the revenue and related liabilities for the month.

Accepted Answer

The answer of English Company billed its customers a total...

Question 19

On October 1, 2018, Pennington Company issued a $90,000, 10%, nine-month interest-bearing note. If the Pennington Company is preparing financial statements at December 31, 2018, the adjusting entry for accrued interest will include a:

Accepted Answer

A)  credit to Notes Payable of $2,250. 
B)  debit to Interest Expense of $2,250 
C)  credit to Interest Payable of $4,500. 
D)  debit to Interest Expense of $3,375. 
A)  credit to Notes Payable of $2,250. 
B)  debit to Interest Expense of $2,250 
C)  credit to Interest Payable of $4,500. 
D)  debit to Interest Expense of $3,375.

Question 20

Generally, convertible bonds do not pay interest.

Accepted Answer

A) True 
 B)False

A note payable must always be paid before an account payable.

Discount on Bonds Payable is (from)(to) bonds payable on the balance sheet. Premium on Bonds Payable is (from)(to) bonds payable on the balance sheet.

Each payment on a mortgage note payable consists of

Based on the following information, compute the (1) current ratio and (2) working capital.

Presented here is a partial amortization schedule for Roseland Company who sold $300,000, five year 10% bonds on January 1, 2017 for $318,000 and uses annual straight-line amortization. Which of the following amounts should be shown in cell (iii)?

Presented here is a partial amortization schedule for Roseland Company who sold $300,000, five year 10% bonds on January 1, 2017 for $312,000 and uses annual straight-line amortization. Which of the following amounts should be shown in cell (i)?

A $30,000, 8%, 9-month note payable requires an interest payment of $1,800 at maturity.

When authorizing bonds to be issued, the board of directors does not specify the

The holder of a convertible bond can convert an interest payment received into a cash dividend paid on common stock if the dividend is greater than the interest payment.

Korean Corporation issued $2 million, 10-year, 6% bonds on January 1, 2018. Instructions Prepare the entry to record the sale of these bonds, assuming they were issued at (a) 98. (b) 103.

The terms of a bond issue are set forth in a formal legal document called a bond ________________.

Employee payroll deductions include each of the following except

Farris Company borrowed $800,000 from BankTwo on January 1, 2017 in order to expand its mining capabilities. The five-year note required annual payments of $208,349 and carried an annual interest rate of 8.5%. What is the amount of expense Farris must recognize on its 2018 income statement?

A 10% stock dividend is the equivalent of a $1,000 par value bond paying annual interest of 10%.

On September 1, Joe's Painting Service borrows $150,000 from National Bank on a 4-month, $150,000, 6% note. The entry by Joe's Painting Service to record payment of the note and accrued interest on January 1 is

Gains and losses are not recognized when convertible bonds are converted into common stock.

On October 1, 2018, Pennington Company issued a $90,000, 10%, nine-month interest-bearing note. If the Pennington Company is preparing financial statements at December 31, 2018, the adjusting entry for accrued interest will include a:

Generally, convertible bonds do not pay interest.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters

Exam 10: Liabilities

A note payable must always be paid before an account payable.

Discount on Bonds Payable is ________________ (from)(to) bonds payable on the balance sheet. Premium on Bonds Payable is ________________ (from)(to) bonds payable on the balance sheet.

Each payment on a mortgage note payable consists of

Based on the following information, compute the (1) current ratio and (2) working capital.

Presented here is a partial amortization schedule for Roseland Company who sold $300,000, five year 10% bonds on January 1, 2017 for $318,000 and uses annual straight-line amortization. Which of the following amounts should be shown in cell (iii)?

Presented here is a partial amortization schedule for Roseland Company who sold $300,000, five year 10% bonds on January 1, 2017 for $312,000 and uses annual straight-line amortization. Which of the following amounts should be shown in cell (i)?

A $30,000, 8%, 9-month note payable requires an interest payment of $1,800 at maturity.

When authorizing bonds to be issued, the board of directors does not specify the

The holder of a convertible bond can convert an interest payment received into a cash dividend paid on common stock if the dividend is greater than the interest payment.

Korean Corporation issued $2 million, 10-year, 6% bonds on January 1, 2018. Instructions Prepare the entry to record the sale of these bonds, assuming they were issued at (a) 98. (b) 103.

The terms of a bond issue are set forth in a formal legal document called a bond ________________.

Employee payroll deductions include each of the following except

Farris Company borrowed $800,000 from BankTwo on January 1, 2017 in order to expand its mining capabilities. The five-year note required annual payments of $208,349 and carried an annual interest rate of 8.5%. What is the amount of expense Farris must recognize on its 2018 income statement?

A 10% stock dividend is the equivalent of a $1,000 par value bond paying annual interest of 10%.

On September 1, Joe's Painting Service borrows $150,000 from National Bank on a 4-month, $150,000, 6% note. The entry by Joe's Painting Service to record payment of the note and accrued interest on January 1 is

Gains and losses are not recognized when convertible bonds are converted into common stock.

On October 1, 2018, Pennington Company issued a $90,000, 10%, nine-month interest-bearing note. If the Pennington Company is preparing financial statements at December 31, 2018, the adjusting entry for accrued interest will include a:

Generally, convertible bonds do not pay interest.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters

Discount on Bonds Payable is (from)(to) bonds payable on the balance sheet. Premium on Bonds Payable is (from)(to) bonds payable on the balance sheet.