Exam 9: Long-Term Liabilities

On July 1,2019,Bobby's Building Corp.issued $1,000,000 of 11% bonds dated July 1,2019 for $1,062,771.The bonds were sold to yield 10% and pay interest semiannually on July 1 and January 1.Bobby's Building Corp.uses the effective interest method of amortization.The company's fiscal year ends on February 28. Required: 1.Prepare the journal entry on July 1,2019. 2.Prepare the amortization table for the first two interest periods. 3.Prepare the journal entry on January 1,2020. Round all amounts to the nearest dollar.Omit explanations for all journal entries. 1. 2. 3.

(Essay)

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Question 41

A bond will sell at a premium when:

(Multiple Choice)

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Question 42

On January 1,2019,Paulsen Company issued $600,000,6%,5-year bonds at face value.Interest is payable semiannually on July 1 and January 1. Required: Prepare journal entries on: 1.January 1,2019 2.July 1,2019 3.December 31,2019,the fiscal year end Omit explanations.

(Essay)

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Question 43

If,as part of the accounting for a lease,the lessee debits an asset and credits a liability,then the lease must be a(n):

(Multiple Choice)

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Question 44

Unsecured bonds are called .Secured bonds are called .

(Multiple Choice)

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Question 45

Which type of lease will NOT increase a company's assets or long-term liabilities?

(Multiple Choice)

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Question 46

If bonds are issued at a discount,it means that the:

(Multiple Choice)

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Question 47

The retirement of callable bonds at an amount below face value would appear on a statement of cash flows as an:

(Multiple Choice)

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Question 48

The times-interest-earned ratio indicates the company's ability to pay interest expense.

(True/False)

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Question 49

At maturity,the carrying amount of bonds should equal the face value of the bonds.

(True/False)

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Question 50

Darla's Cookie Emporium borrowed money by issuing $200,000 of bonds at 96 on January 1,2019.The bonds pay interest on January 1 and July 1.The stated rate of interest is 5% and the bonds mature in 10 years.Any discount or premium is amortized using the straight-line method. Required: Prepare journal entries on the following dates: 1.January 1,2019. 2.July 1,2019. 3.December 31,2019,the fiscal year end. 4.January 1,2020. 5.January 1,2029. Omit explanations.

(Essay)

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Question 51

Maybelline Corporation issues $2,700,000,10-year,8% bonds dated January 1 at 101.The journal entry to record the issuance will include a:

(Multiple Choice)

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Question 52

If convertible notes payable are converted into common stock,the entry to record the conversion would include a debit to:

(Multiple Choice)

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Question 53

On January 1,2019,Chin Corporation issued $2,900,000,16%,5-year bonds.The bond interest is payable on January 1 and July 1.The bonds sold for $3,119,600.The market rate of interest for these bonds was 14%.Under the effective-interest method,what is the interest expense for the six months ending July 1,2019?

(Multiple Choice)

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Question 54

In the balance sheet,the account,Premium on Bonds Payable,is:

(Multiple Choice)

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Question 55

Frank's Boat Shop,Inc.reports operating income of $80,000 and interest expense of $15,000.The average number of shares of common stock outstanding during the year was 30,000 shares.What is the times-interest-earned ratio? (Round your final answer to two decimal places. )

(Multiple Choice)

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Question 56

For tax reporting purposes,a company must follow the rules set by the Internal Revenue Code (IRC)when determining income taxes payable and deferred income taxes.

(True/False)

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Question 57

The leverage ratio is equal to average total divided by average .

(Multiple Choice)

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Question 58

Wayne Technical Corporation signed a lease for equipment,which requires lease payments of $50,000 per year for four years.The equipment has an estimated useful life of 7 years.This lease would be a finance lease if:

(Multiple Choice)

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Question 59

Under the effective-interest method of amortization,interest expense for each interest period can be calculated by multiplying the:

(Multiple Choice)

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Question 60

Showing 41 - 60 of 120

A bond will sell at a premium when:

On January 1,2019,Paulsen Company issued $600,000,6%,5-year bonds at face value.Interest is payable semiannually on July 1 and January 1. Required: Prepare journal entries on: 1.January 1,2019 2.July 1,2019 3.December 31,2019,the fiscal year end Omit explanations.

If,as part of the accounting for a lease,the lessee debits an asset and credits a liability,then the lease must be a(n):

Unsecured bonds are called .Secured bonds are called .

Which type of lease will NOT increase a company's assets or long-term liabilities?

If bonds are issued at a discount,it means that the:

The retirement of callable bonds at an amount below face value would appear on a statement of cash flows as an:

The times-interest-earned ratio indicates the company's ability to pay interest expense.

At maturity,the carrying amount of bonds should equal the face value of the bonds.

Maybelline Corporation issues $2,700,000,10-year,8% bonds dated January 1 at 101.The journal entry to record the issuance will include a:

If convertible notes payable are converted into common stock,the entry to record the conversion would include a debit to:

In the balance sheet,the account,Premium on Bonds Payable,is:

Frank's Boat Shop,Inc.reports operating income of $80,000 and interest expense of $15,000.The average number of shares of common stock outstanding during the year was 30,000 shares.What is the times-interest-earned ratio? (Round your final answer to two decimal places. )

For tax reporting purposes,a company must follow the rules set by the Internal Revenue Code (IRC)when determining income taxes payable and deferred income taxes.

The leverage ratio is equal to average total divided by average .

Wayne Technical Corporation signed a lease for equipment,which requires lease payments of $50,000 per year for four years.The equipment has an estimated useful life of 7 years.This lease would be a finance lease if:

Under the effective-interest method of amortization,interest expense for each interest period can be calculated by multiplying the:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 9: Long-Term Liabilities

A bond will sell at a premium when:

On January 1,2019,Paulsen Company issued $600,000,6%,5-year bonds at face value.Interest is payable semiannually on July 1 and January 1. Required: Prepare journal entries on: 1.January 1,2019 2.July 1,2019 3.December 31,2019,the fiscal year end Omit explanations.

If,as part of the accounting for a lease,the lessee debits an asset and credits a liability,then the lease must be a(n):

Unsecured bonds are called ________.Secured bonds are called ________.

Which type of lease will NOT increase a company's assets or long-term liabilities?

If bonds are issued at a discount,it means that the:

The retirement of callable bonds at an amount below face value would appear on a statement of cash flows as an:

The times-interest-earned ratio indicates the company's ability to pay interest expense.

At maturity,the carrying amount of bonds should equal the face value of the bonds.

Maybelline Corporation issues $2,700,000,10-year,8% bonds dated January 1 at 101.The journal entry to record the issuance will include a:

If convertible notes payable are converted into common stock,the entry to record the conversion would include a debit to:

In the balance sheet,the account,Premium on Bonds Payable,is:

Frank's Boat Shop,Inc.reports operating income of $80,000 and interest expense of $15,000.The average number of shares of common stock outstanding during the year was 30,000 shares.What is the times-interest-earned ratio? (Round your final answer to two decimal places. )

For tax reporting purposes,a company must follow the rules set by the Internal Revenue Code (IRC)when determining income taxes payable and deferred income taxes.

The leverage ratio is equal to average total ________ divided by average ________.

Wayne Technical Corporation signed a lease for equipment,which requires lease payments of $50,000 per year for four years.The equipment has an estimated useful life of 7 years.This lease would be a finance lease if:

Under the effective-interest method of amortization,interest expense for each interest period can be calculated by multiplying the:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Unsecured bonds are called .Secured bonds are called .

The leverage ratio is equal to average total divided by average .