Exam 9: Reporting and Analyzing Liabilities

If bonds are issued at a premium, the carrying value of the bonds will be greater than the face value of the bonds for all periods prior to the bond maturity date.

Sparks Company received proceeds of $634,500 on 10-year, 8% bonds issued on January 1, 2016. The bonds had a face value of $600,000, pay interest annually on December 31st, and have a call price of 102. Sparks uses the straight-line method of amortization. Sparks Company decided to redeem the bonds on January 1, 2018. What amount of gain or loss would Sparks report on their 2018 income statement?

On January 1, 2017, $3,000,000, 10-year, 10% bonds, were issued for $2,910,000. Interest is paid annually on January 1. If the issuing corporation uses the straight-line method to amortize discount on bonds payable, the monthly amortization amount is

Scribner Company issued $800,000 of 8%, 5-year bonds at 106. Assuming straight-line amortization and annual interest payments, how much bond interest expense is recorded on the next interest date?

Failure to record a liability will probably

Warner Company issued $5,000,000 of 6%, 10-year bonds on one of its interest dates for $4,318,500 to yield an effective annual rate of 8%. The effective-interest method of amortization is to be used. The journal entry to be recorded at the end of the second year for the payment of interest and the amortization of discount will include a

Five thousand bonds with a face value of $1,000 each, are sold at 102. The entry to record the issuance is

The interest charged on a $300,000 note payable, at the rate of 6%, on a 90-day note would be

Keller Company issued a five-year interest-bearing note payable for $300,000 on January 1, 2016. Each January the company is required to pay $60,000 on the note. How will this note be reported on the December 31, 2017, balance sheet?

Notes payable usually require the borrower to pay interest.

A corporation issues $300,000, 8%, 5-year bonds on January 1, 2017, for $312,600. Interest is paid annually on January 1. If the corporation uses the straight-line method of amortization of bond premium, the amount of bond interest expense to be recognized in December 31, 2017's adjusting entry is

Total interest cost for a bond issued at a premium equals the total of the periodic interest payments minus the premium.

The adjusted trial balance for Beneteau Corporation at the end of the 2017 included the following accounts: 5-year Bonds Payable 8\% 6,620,000 Bond Interest Payable 240,000 Notes Payable (3 mo.) 50,000 Notes Payable (5.) 1,650,000 Mortgage Payable ( 150,000 due currently) 2,000,000 Salaries and Wages Payable 68,000 Taxes Payable (due 3/15 of next vear) 85,000 The total non-current liabilities reported on the statement of financial position at December 31, 2017 are

The relationship between current assets and current liabilities is

Sparks Company received proceeds of $634,500 on 10-year, 8% bonds issued on January 1, 2016. The bonds had a face value of $600,000, pay interest annually on December 31st, and have a call price of 102. Sparks uses the straight-line method of amortization. What is the amount of interest Sparks must pay the bondholders in 2016?

Chang Company retired bonds with a face amount of ¥60,000,000 at 98 when the carrying value of the bond was ¥59,780,000. The entry to record the retirement would include a

Tina's Boutique has total receipts for the month of $32,340 including sales taxes. If the sales tax rate is 5%, what are Tina's sales for the month?

The current carrying value of Kennett's $800,000 face value bonds is $797,000. If the bonds are retired at 102, what would be the amount Kennett would pay its bondholders?

A company receives $264, of which $24 is for sales tax. The journal entry to record the sale would include a

Parker Company issued ten-year, 9%, bonds payable in 2017 at a premium. During 2017, the company's accountant failed to amortize any of the bond premium. The omission of the premium amortization will