Exam 10: Reporting and Analyzing Liabilities

Bonds that mature at a single specified future date are called _________________ bonds, whereas bonds that mature in installments are called __________________ bonds.

When determining the value of a bond using present value, what are the two components used in the calculation?

Hulse Corporation retires its $600,000 face value bonds at 105 on January 1, following the payment of annual interest. The carrying value of the bonds at the redemption date is $622,470. The entry to record the redemption will include a

Mohling Company typically sells subscriptions on an annual basis, and publishes eight times a year. The magazine sells 45,000 subscriptions in January at $10 each. What entry is made in January to record the sale of the subscriptions?

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

Interest expense on an interest-bearing note is

Madson Company typically sells subscriptions on an annual basis, and publishes six times a year. The magazine sells 75,000 subscriptions in January at $10 each. What entry is made in January to record the sale of the subscriptions?

The interest charged on a $70,000 note payable, at the rate of 6%, on a 60-day note would be

The ________________ provides an indication of a company's ability to meet interest payments as they come due.

If the market rate of interest at the date of issuance of a bond is greater than the stated interest rate, the bond will be issued at a premium.

As interest is recorded on an interest-bearing note, the Interest Expense account is

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

Sparks Company received proceeds of $423,000 on 10-year, 8% bonds issued on January 1, 2013. The bonds had a face value of $400,000, 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, 2015. What amount of gain or loss would Sparks report on their 2015 income statement?

On May 15, Holt's Clothiers borrowed some money on a 4-month note to provide cash during the slow season of the year. The interest rate on the note was 8%. At the time the note was due, the amount of interest owed was $1,200. Instructions (a) Determine the amount borrowed by Holt's. (b) Assume the amount borrowed was $54,000. What was the interest rate if the amount of interest owed was $900? (c) Prepare the entry for the initial borrowing and the repayment for the facts in part (a).

Metropolitan Symphony sells 200 season tickets for $40,000 that includes a five-concert season. The amount of Unearned Ticket Revenue after the third concert is $24,000.

Bonds with a face value of $400,000 and a quoted price of 104¼ have a selling price of

West County Bank agrees to lend Drake Builders Company $200,000 on January 1. Drake Builders Company signs a $200,000, 6%, 6-month note. What is the adjusting entry required if Drake Builders Company prepares financial statements on March 30?

Sielert Corporation borrowed $900,000 from National Bank on May 31, 2013. The three-year, 7% note required annual payments of $342,945 beginning May 31, 2014. Interest expense for the year ended December 31, 2013 was

Thayer Company purchased a building on January 2 by signing a long-term $2,520,000 mortgage with monthly payments of $23,100. The mortgage carries an interest rate of 10 percent. The entry to record the mortgage will include a

The following totals for the month of April were taken from the payroll records of Noll Company. Salaries $60,000 FICA taxes withheld 4,590 Income taxes withheld 12,500 Medical insurance deductions 2,250 Federal unemployment taxes 160 State unemployment taxes 1,080 The journal entry to record the monthly payroll on April 30 would include a