Question 1

In most companies, current liabilities are paid within

Accepted Answer

A)  one year through the creation of other current liabilities. 
B)  the operating cycle through the creation of other current liabilities. 
C)  one year or the operating cycle out of current assets. 
D)  the operating cycle out of current assets. 
A)  one year through the creation of other current liabilities. 
B)  the operating cycle through the creation of other current liabilities. 
C)  one year or the operating cycle out of current assets. 
D)  the operating cycle out of current assets.

Question 2

The entry to record the issuance of an interest-bearing note credits Notes Payable for the note's

Accepted Answer

A)  maturity value. 
B)  market value. 
C)  face value. 
D)  cash realizable value. 
A)  maturity value. 
B)  market value. 
C)  face value. 
D)  cash realizable value.

Question 3

Bonds that have specific assets of the issuer pledged as collateral are

Accepted Answer

A)  secured bonds. 
B)  callable bonds. 
C)  convertible bonds. 
D)  debenture bonds. 
A)  secured bonds. 
B)  callable bonds. 
C)  convertible bonds. 
D)  debenture bonds.

Question 4

During December 2017, Markowitz Publishing sold 4,500 12-month annual magazine subscriptions at a rate of $20 each. The first issues were mailed in February 2018. Prepare the entries on Markowitz's books to record the sale of the subscriptions and the mailing of the first issues.

Accepted Answer

The answer of During December 2017, Markowitz Publishing sold 4,500...

Question 5

49. The effective-interest method of amortization results in varying amounts of amortization and interest expense per period but a constant interest rate.

Accepted Answer

A) True 
 B)False

Question 6

The straight-line method of amortization allocates the same amount to _______________ in each interest period.

Accepted Answer

The answer of The straight-line method of amortization allocates the...

Question 7

Current maturities of long-term debt are often identified as long-term debt due within one year on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 8

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 balance in the notes payable account at January 1, 2019?

Accepted Answer

A)  $800,000 
B)  $507,372 
C)  $659,651 
D)  $664,000 
A)  $800,000 
B)  $507,372 
C)  $659,651 
D)  $664,000

Question 9

Bond interest paid is

Accepted Answer

A)  higher when bonds sell at a discount. 
B)  lower when bonds sell at a premium. 
C)  the same whether bonds sell at a discount or a premium. 
D)  higher when bonds sell at a discount and lower when bonds sell at a premium. 
A)  higher when bonds sell at a discount. 
B)  lower when bonds sell at a premium. 
C)  the same whether bonds sell at a discount or a premium. 
D)  higher when bonds sell at a discount and lower when bonds sell at a premium.

Question 10

The loss on bond redemption is the difference between the cash paid and the carrying value of the bonds.

Accepted Answer

A) True 
 B)False

Question 11

The carrying value of bonds at maturity should be equal to the face value of the bonds.

Accepted Answer

A) True 
 B)False

Question 12

Casey Company retired $500,000 face value, 9% bonds on June 30, 2018 at 96. The carrying value of the bonds at the redemption date was $508,000.
Instructions
Prepare the journal entry to record the redemption of the bonds.

Accepted Answer

The answer of Casey Company retired $500,000 face value, 9%...

Question 13

Three plans for financing a $20,000,000 corporation are under consideration by its organizers. Under each of the following plans, the securities will be issued at their par or face amount and the income tax rate is estimated at 30%.   It is estimated that income before interest and taxes will be $5,000,000.
Instructions
Determine for each plan, the expected net income and the earnings per share on common stock.

Accepted Answer

The answer of Three plans for financing a $20,000,000 corporation...

Question 14

304. A method of amortizing bond discount or premium that allocates an equal amount each period is the ________________ method.

Accepted Answer

Question 15

206. Trendy Company issued $600,000 of 8%, 5-year bonds at 105. Assuming straight-line amortization and annual interest payments, how much bond interest expense is recorded on the next interest date?

Accepted Answer

A)  $48,000 
B)  $54,000 
C)  $42,000 
D)  $6,000 
A)  $48,000 
B)  $54,000 
C)  $42,000 
D)  $6,000

Question 16

BE 249
On January 1, 2018, Morris Enterprises issued 9%, 5-year bonds with a face amount of $900,000 at par. Interest is payable annually on January 1.
Instructions
Prepare the entries to record the issuance of the bonds and the first annual interest accrual on December 31.

Accepted Answer

The answer of BE 249
On January 1, 2018, Morris Enterprises...

Question 17

A long-term note that pledges title to specific property as security for a loan is known as a mortgage payable.

Accepted Answer

A) True 
 B)False

Question 18

On December 31, 2017, Plank Corporation issued $800,000, 6%, 5-year bonds for $735,100. The bonds were sold to yield an effective-interest rate of 8%. Interest is paid annually on December 31. The company uses the effective-interest method of amortization.
Instructions
(a) Prepare a bond discount amortization schedule which shows the amortization of discount for the first two interest payment dates. (Round to the nearest dollar.)
(b) Prepare the journal entries that Plank Corporation would make on December 31, 2017, December 31, 2018 and December 31, 2016 related to the bond issue.

Accepted Answer

Question 19

On December 1, 2017, Crawley Corporation incurs a 15-year $600,000 mortgage liability in conjunction with the acquisition of an office building. This mortgage is payable in monthly installments of $7,200, which include interest computed at the rate of 12% per year. The first monthly payment is made on December 31, 2017. The portion of the second monthly payment made on January 31, 2018, which represents repayment of principal is:

Accepted Answer

A)  $1,200. 
B)  $1,212. 
C)  $7,200. 
D)  $5,988. 
A)  $1,200. 
B)  $1,212. 
C)  $7,200. 
D)  $5,988.

Question 20

On January 1, 2018, Donahue Company, a calendar-year company, issued $600,000 of notes payable, of which $150,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2018, is

Accepted Answer

A)  Current Liabilities, $600,000. 
B)  Long-term Debt , $600,000. 
C)  Current Liabilities, $150,000; Long-term Debt, $450,000. 
D)  Current Liabilities, $450,000; Long-term Debt, $150,000. 
A)  Current Liabilities, $600,000. 
B)  Long-term Debt , $600,000. 
C)  Current Liabilities, $150,000; Long-term Debt, $450,000. 
D)  Current Liabilities, $450,000; Long-term Debt, $150,000.

In most companies, current liabilities are paid within

The entry to record the issuance of an interest-bearing note credits Notes Payable for the note's

Bonds that have specific assets of the issuer pledged as collateral are

During December 2017, Markowitz Publishing sold 4,500 12-month annual magazine subscriptions at a rate of $20 each. The first issues were mailed in February 2018. Prepare the entries on Markowitz's books to record the sale of the subscriptions and the mailing of the first issues.

49. The effective-interest method of amortization results in varying amounts of amortization and interest expense per period but a constant interest rate.

The straight-line method of amortization allocates the same amount to _______________ in each interest period.

Current maturities of long-term debt are often identified as long-term debt due within one year on the balance sheet.

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 balance in the notes payable account at January 1, 2019?

Bond interest paid is

The loss on bond redemption is the difference between the cash paid and the carrying value of the bonds.

The carrying value of bonds at maturity should be equal to the face value of the bonds.

Casey Company retired $500,000 face value, 9% bonds on June 30, 2018 at 96. The carrying value of the bonds at the redemption date was $508,000. Instructions Prepare the journal entry to record the redemption of the bonds.

304. A method of amortizing bond discount or premium that allocates an equal amount each period is the ________________ method.

206. Trendy Company issued $600,000 of 8%, 5-year bonds at 105. Assuming straight-line amortization and annual interest payments, how much bond interest expense is recorded on the next interest date?

BE 249 On January 1, 2018, Morris Enterprises issued 9%, 5-year bonds with a face amount of $900,000 at par. Interest is payable annually on January 1. Instructions Prepare the entries to record the issuance of the bonds and the first annual interest accrual on December 31.

A long-term note that pledges title to specific property as security for a loan is known as a mortgage payable.

On January 1, 2018, Donahue Company, a calendar-year company, issued $600,000 of notes payable, of which $150,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2018, is

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

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Exam 10: Liabilities

In most companies, current liabilities are paid within

The entry to record the issuance of an interest-bearing note credits Notes Payable for the note's

Bonds that have specific assets of the issuer pledged as collateral are

During December 2017, Markowitz Publishing sold 4,500 12-month annual magazine subscriptions at a rate of $20 each. The first issues were mailed in February 2018. Prepare the entries on Markowitz's books to record the sale of the subscriptions and the mailing of the first issues.

49. The effective-interest method of amortization results in varying amounts of amortization and interest expense per period but a constant interest rate.

The straight-line method of amortization allocates the same amount to _______________ in each interest period.

Current maturities of long-term debt are often identified as long-term debt due within one year on the balance sheet.

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 balance in the notes payable account at January 1, 2019?

Bond interest paid is

The loss on bond redemption is the difference between the cash paid and the carrying value of the bonds.

The carrying value of bonds at maturity should be equal to the face value of the bonds.

Casey Company retired $500,000 face value, 9% bonds on June 30, 2018 at 96. The carrying value of the bonds at the redemption date was $508,000. Instructions Prepare the journal entry to record the redemption of the bonds.

304. A method of amortizing bond discount or premium that allocates an equal amount each period is the ________________ method.

206. Trendy Company issued $600,000 of 8%, 5-year bonds at 105. Assuming straight-line amortization and annual interest payments, how much bond interest expense is recorded on the next interest date?

BE 249 On January 1, 2018, Morris Enterprises issued 9%, 5-year bonds with a face amount of $900,000 at par. Interest is payable annually on January 1. Instructions Prepare the entries to record the issuance of the bonds and the first annual interest accrual on December 31.

A long-term note that pledges title to specific property as security for a loan is known as a mortgage payable.

On January 1, 2018, Donahue Company, a calendar-year company, issued $600,000 of notes payable, of which $150,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2018, is

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