Question 1

In the balance sheet, mortgage notes payable are reported as

Accepted Answer

A)  a current liability only. 
B)  a long-term liability only. 
C)  both a current and a long-term liability. 
D)  a current liability except for the reduction in principal amount. 
A)  a current liability only. 
B)  a long-term liability only. 
C)  both a current and a long-term liability. 
D)  a current liability except for the reduction in principal amount.

Question 2

Lake Company received proceeds of $188,000 on 10-year, 6% bonds issued on January 1, 2018. The bonds had a face value of $200,000, pay interest annually on January 1, and have a call price of 101. Lake uses the straight-line method of amortization. What is the amount of interest Lake must pay the bondholders on January 1, 2019?

Accepted Answer

A)  $11,200 
B)  $12,000 
C)  $13,200 
D)  $10,800 
A)  $11,200 
B)  $12,000 
C)  $13,200 
D)  $10,800

Question 3

On the date of issue, Chudzick Corporation sells $5 million of 5-year bonds at 97. The entry to record the sale will include the following debits and credits:

Accepted Answer

The answer of On the date of issue, Chudzick Corporation...

Question 4

Bonds that permit bondholders to convert them into common stock at their option are known as callable bonds.

Accepted Answer

A) True 
 B)False

Question 5

Each bondholder may vote for the board of directors in proportion to the number of bonds held.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements concerning bonds is not a true statement?

Accepted Answer

A)  Bonds are generally sold through an investment company. 
B)  The bond indenture is prepared after the bonds are printed. 
C)  The bond indenture and bond certificate are separate documents. 
D)  The trustee keeps records of each bondholder. 
A)  Bonds are generally sold through an investment company. 
B)  The bond indenture is prepared after the bonds are printed. 
C)  The bond indenture and bond certificate are separate documents. 
D)  The trustee keeps records of each bondholder.

Question 7

A $600,000 bond was retired at 102 when the carrying value of the bond was $622,000. The entry to record the retirement would include a

Accepted Answer

A)  gain on bond redemption of $12,000. 
B)  loss on bond redemption of $10,000. 
C)  loss on bond redemption of $12,000. 
D)  gain on bond redemption of $10,000. 
A)  gain on bond redemption of $12,000. 
B)  loss on bond redemption of $10,000. 
C)  loss on bond redemption of $12,000. 
D)  gain on bond redemption of $10,000.

Question 8

Which of the following statements about liabilities in incorrect? Under IFRS, companies sometimes show

Accepted Answer

A)  liabilities before assets. 
B)  long-term liabilities before current assets. 
C)  current liabilities netted against current assets. 
D)  liabilities in order of magnitude.
IFRS. 
A)  liabilities before assets. 
B)  long-term liabilities before current assets. 
C)  current liabilities netted against current assets. 
D)  liabilities in order of magnitude.
IFRS.

Question 9

On August 1, 2017, a company borrowed cash and signed a one-year interest-bearing note on which both the face value and interest are payable on August 1, 2018. How will the note payable and the related interest be classified in the December 31, 2017, balance sheet?

Accepted Answer

The answer of On August 1, 2017, a company borrowed...

Question 10

Bargain Company has $1,500,000 of bonds outstanding. The unamortized premium is $19,600. If the company redeemed the bonds at 101, what would be the gain or loss on the redemption?

Accepted Answer

A)  $4,600 gain 
B)  $4,600 loss 
C)  $15,000 gain 
D)  $15,000 loss 
A)  $4,600 gain 
B)  $4,600 loss 
C)  $15,000 gain 
D)  $15,000 loss

Question 11

Niebuhr Company issued $400,000 of bonds on January 1, 2018.
Instructions
(a) Prepare the journal entry to record the retirement of the bonds at maturity, assuming the bonds were issued at 100.
(b) Prepare the journal entry to record the retirement of the bonds before maturity at 97. Assume the balance in Premium on Bonds Payable is $4,000.
(c) Prepare the journal entry to record the conversion of the bonds into 15,000 shares of $10 par value common stock. Assume the bonds were issued at par.

Accepted Answer

The answer of Niebuhr Company issued $400,000 of bonds on...

Question 12

BE 254
Roxy Inc. issues a $1,500,000, 10%, 10-year mortgage note on December 31, 2018, to obtain financing for a new building. The terms provide for annual installment payments of $244,118.
Instructions
Prepare the entry to record the mortgage loan on December 31, 2018, and the first installment payment on December 31, 2019.

Accepted Answer

The answer of BE 254
Roxy Inc. issues a $1,500,000, 10%,...

Question 13

214. Jarmin Company received proceeds of $377,000 on 10-year, 8% bonds issued on January 1, 2017. The bonds had a face value of $400,000, pay interest annually on June 30 and December 31, and have a call price of 101. Jarmin uses the straight-line method of amortization. What is the carrying value of the bonds on January 1, 2019?

Accepted Answer

A)  $400,000 
B)  $381,600 
C)  $395,400 
D)  $379,300 
A)  $400,000 
B)  $381,600 
C)  $395,400 
D)  $379,300

Question 14

Any balance in an unearned revenue account is reported as a(n)

Accepted Answer

A)  current liability. 
B)  long-term debt. 
C)  revenue. 
D)  unearned liability. 
A)  current liability. 
B)  long-term debt. 
C)  revenue. 
D)  unearned liability.

Question 15

204. Stable Company issued $500,000 of 6%, 5-year bonds at 98, with interest paid annually. Assuming straight-line amortization, what is the total interest cost of the bonds?

Accepted Answer

A)  $150,000 
B)  $160,000 
C)  $145,000 
D)  $140,000 
A)  $150,000 
B)  $160,000 
C)  $145,000 
D)  $140,000

Question 16

When bonds are converted into common stock, the carrying value of the bonds is transferred to paid-in capital accounts.

Accepted Answer

A) True 
 B)False

Question 17

The interest charged on a $90,000, 3-month note payable, at the rate of 8%, would be

Accepted Answer

A)  $7,200. 
B)  $3,600. 
C)  $1,800. 
D)  $1,200. 
A)  $7,200. 
B)  $3,600. 
C)  $1,800. 
D)  $1,200.

Question 18

Layton Company does not ring up sales taxes separately on the cash register. Total receipts for October amounted to $29,400. If the sales tax rate is 5%, what amount must be remitted to the state for October's sales taxes?

Accepted Answer

A)  $1,400 
B)  $1,470 
C)  $70 
D)  It cannot be determined. 
A)  $1,400 
B)  $1,470 
C)  $70 
D)  It cannot be determined.

Question 19

A corporation recognizes a gain or loss

Accepted Answer

A)  only when bonds are converted into common stock. 
B)  only when bonds are redeemed before maturity. 
C)  when bonds are redeemed at or before maturity. 
D)  when bonds are converted into common stock and when they are redeemed before maturity. 
A)  only when bonds are converted into common stock. 
B)  only when bonds are redeemed before maturity. 
C)  when bonds are redeemed at or before maturity. 
D)  when bonds are converted into common stock and when they are redeemed before maturity.

Question 20

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 (iv)?

Accepted Answer

A)  $16,200. 
B)  $10,800. 
C)  $21,600. 
D)  $14,400. 
A)  $16,200. 
B)  $10,800. 
C)  $21,600. 
D)  $14,400.

In the balance sheet, mortgage notes payable are reported as

On the date of issue, Chudzick Corporation sells $5 million of 5-year bonds at 97. The entry to record the sale will include the following debits and credits:

Bonds that permit bondholders to convert them into common stock at their option are known as callable bonds.

Each bondholder may vote for the board of directors in proportion to the number of bonds held.

Which of the following statements concerning bonds is not a true statement?

A $600,000 bond was retired at 102 when the carrying value of the bond was $622,000. The entry to record the retirement would include a

Which of the following statements about liabilities in incorrect? Under IFRS, companies sometimes show

On August 1, 2017, a company borrowed cash and signed a one-year interest-bearing note on which both the face value and interest are payable on August 1, 2018. How will the note payable and the related interest be classified in the December 31, 2017, balance sheet?

Bargain Company has $1,500,000 of bonds outstanding. The unamortized premium is $19,600. If the company redeemed the bonds at 101, what would be the gain or loss on the redemption?

Any balance in an unearned revenue account is reported as a(n)

204. Stable Company issued $500,000 of 6%, 5-year bonds at 98, with interest paid annually. Assuming straight-line amortization, what is the total interest cost of the bonds?

When bonds are converted into common stock, the carrying value of the bonds is transferred to paid-in capital accounts.

The interest charged on a $90,000, 3-month note payable, at the rate of 8%, would be

Layton Company does not ring up sales taxes separately on the cash register. Total receipts for October amounted to $29,400. If the sales tax rate is 5%, what amount must be remitted to the state for October's sales taxes?

A corporation recognizes a gain or loss

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 (iv)?

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

In the balance sheet, mortgage notes payable are reported as

On the date of issue, Chudzick Corporation sells $5 million of 5-year bonds at 97. The entry to record the sale will include the following debits and credits:

Bonds that permit bondholders to convert them into common stock at their option are known as callable bonds.

Each bondholder may vote for the board of directors in proportion to the number of bonds held.

Which of the following statements concerning bonds is not a true statement?

A $600,000 bond was retired at 102 when the carrying value of the bond was $622,000. The entry to record the retirement would include a

Which of the following statements about liabilities in incorrect? Under IFRS, companies sometimes show

On August 1, 2017, a company borrowed cash and signed a one-year interest-bearing note on which both the face value and interest are payable on August 1, 2018. How will the note payable and the related interest be classified in the December 31, 2017, balance sheet?

Bargain Company has $1,500,000 of bonds outstanding. The unamortized premium is $19,600. If the company redeemed the bonds at 101, what would be the gain or loss on the redemption?

Any balance in an unearned revenue account is reported as a(n)

204. Stable Company issued $500,000 of 6%, 5-year bonds at 98, with interest paid annually. Assuming straight-line amortization, what is the total interest cost of the bonds?

When bonds are converted into common stock, the carrying value of the bonds is transferred to paid-in capital accounts.

The interest charged on a $90,000, 3-month note payable, at the rate of 8%, would be

Layton Company does not ring up sales taxes separately on the cash register. Total receipts for October amounted to $29,400. If the sales tax rate is 5%, what amount must be remitted to the state for October's sales taxes?

A corporation recognizes a gain or loss

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 (iv)?

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