Exam 10: Reporting and Analyzing Liabilities

Thayer Company purchased a building on January 2 by signing a long-term $3,360,000 mortgage with monthly payments of $30,800.The mortgage carries an interest rate of 10 percent.The entry to record the first monthly payment will include a

The market value (present value) of a bond is a function of all of the following except the

In the balance sheet, the account Discount on Bonds Payable is

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

Unearned Rent Revenue is

Sielert Corporation borrowed $1,500,000 from National Bank on May 31, 2019.The three-year, 7% note required annual payments of $571,575 beginning May 31, 2020.The total amount of interest to be paid over the life of the loan is

In a recent year, Garvey Corporation had net income of $120,000, interest expense of $20,000, and income tax expense of $30,000.What was Garvey Corporation's times interest earned for the year?

On January 1, 2020, $4,000,000, 5-year, 10% bonds, were issued for $4,240,000.Interest is paid annually on January 1.If the issuing corporation uses the straight-line method to amortize premium on bonds payable, the monthly amortization amount is

Current liabilities are due

When the effective-interest method of amortization is used for a bond premium, the amount of interest expense for an interest period is calculated multiplying the

The interest charged on a $350,000 note payable, at the rate of 6%, on a 60-day note would be

The following totals for the month of April were taken from the payroll records of Metz Company. The entry to record the accrual of federal unemployment tax would include a

If the straight-line method of amortization is used, the amount of unamortized premium on bonds payable will increase as the bonds approach maturity.

Very often, failure to record a liability means failure to record a(n)

Secured bonds are bonds that

A corporation issues $300,000, 8%, 5-year bonds on January 1, 2020 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, 2020's adjusting entry is

An installment note calling for equal total payments each period will result in a principal portion that decreases in each successive period.

Stockholders of a company may be reluctant to finance expansion by issuing more equity because

Bond discount should be amortized to comply with

On January 1, 2020, Keisler Company, a calendar-year company, issued $900,000 of notes payable, of which $225,000 is due on January 1 for each of the next four years.The proper balance sheet presentation on December 31, 2020 is