Exam 10: Reporting and Interpreting Liabilities

On January 1,2016,Effron Inc.sells $2 million of 8% bonds at face value with interest to be paid at the end of each year.Effron accrues interest at the end of each quarter during the year. Required: Part a.Prepare the journal entry to record the bond issuance. Part b.Prepare the required adjusting journal entry as of March 31,2016. Part c.Assume the required adjusting journal entries were recorded on June 30 and September 30,2016.Prepare the journal entry to record the payment of interest to bondholders on December 31,2016.

(Essay)

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Question 81

If ABC Company receives $100,000 cash in exchange for issuing 100 bonds at their $1,000 face value,the transaction will be recorded with a:

(Multiple Choice)

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Question 82

A company issued $100,000 5-year,7% bonds and received $101,137 in cash.The market rate of interest when the bonds were issued was 6.5%.What is the amount of interest expense to be recorded for the first annual interest period if the company uses simplified effective-interest amortization?

(Multiple Choice)

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Question 83

ABC Airlines collects $300 for a roundtrip ticket from Chicago to Los Angeles.The flights will not occur until the next accounting period.How does ABC Airlines record the $300 collected in advance?

(Multiple Choice)

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Question 84

On December 31,2015,Newco borrowed $100,000 from First National Bank,and signed a 12% note payable due in two years.Interest on the note is due at maturity. Required: Part a.Prepare the journal entry to record the borrowing transaction. Part b.Describe how the note should be reported on Newco's classified balance sheets at December 31,2015 and December 31,2016. Part c.Prepare the required adjusting entry on December 31,2016. Part d.Prepare the journal entry to record the payment of the interest on December 31,2017. Part e.Prepare the journal entry to record the payment of the note on December 31,2017.

(Essay)

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Question 85

The law requires ______ to pay FICA taxes.

(Multiple Choice)

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Question 86

If a company forgets to record the journal entry to accrue interest expense,then its net income is too and its liabilities are too :

(Multiple Choice)

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Question 87

If the market rate of interest is 6%,a $10,000,10-year bond with a stated annual interest rate of 8% would be issued at an amount:

(Multiple Choice)

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Question 88

If the market rate exceeds the stated interest rate,a bond will sell at a premium.

(True/False)

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Question 89

The following 12%,$1,000 notes were issued on December 1.Which of the following is the correct method of calculation for the interest accrued as of December 31 of the same year on each of the notes described?

(Multiple Choice)

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Question 90

Which of the following statements about loan terminology is correct?

(Multiple Choice)

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Question 91

A company receives $102,000 when it issues a bond with a face value of $100,000 and a stated interest rate of 7%.Which of the following statements is correct?

(Multiple Choice)

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Question 92

Which one of the following accounts would not necessarily be classified as a current liability?

(Multiple Choice)

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Question 93

Pearly Gates Inc.has a debt-to-assets ratio of 0.55.This means that:

(Multiple Choice)

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Question 94

When bonds are issued at a premium,the bond issuer receives more cash on the issue date than it repays at maturity.The difference,a premium,is a reduction in the cost of borrowing,which has to be:

(Multiple Choice)

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Question 95

The journal entry to record the issuing of 100 bonds at their $1,000 face value will include a debit to and a credit to :

(Multiple Choice)

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Question 96

A company would record an entry with a debit to Bonds Payable and a credit to Cash on a bond's:

(Multiple Choice)

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Question 97

A company purchased equipment by issuing a $200,000,one-year,8% note payable.The transaction would be recorded in the accounting records with a credit to Notes Payable for:

(Multiple Choice)

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Question 98

Amortizing a bond discount will the discount balance and the carrying value of the bond so that when the bond matures the carrying value will __ the face value.

(Multiple Choice)

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Question 99

When the amount of a contingent liability can be reasonably estimated and its likelihood is possible but not probable,the company should:

(Multiple Choice)

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Question 100

Showing 81 - 100 of 235

If ABC Company receives $100,000 cash in exchange for issuing 100 bonds at their $1,000 face value,the transaction will be recorded with a:

A company issued $100,000 5-year,7% bonds and received $101,137 in cash.The market rate of interest when the bonds were issued was 6.5%.What is the amount of interest expense to be recorded for the first annual interest period if the company uses simplified effective-interest amortization?

ABC Airlines collects $300 for a roundtrip ticket from Chicago to Los Angeles.The flights will not occur until the next accounting period.How does ABC Airlines record the $300 collected in advance?

The law requires ______ to pay FICA taxes.

If a company forgets to record the journal entry to accrue interest expense,then its net income is too and its liabilities are too :

If the market rate of interest is 6%,a $10,000,10-year bond with a stated annual interest rate of 8% would be issued at an amount:

If the market rate exceeds the stated interest rate,a bond will sell at a premium.

The following 12%,$1,000 notes were issued on December 1.Which of the following is the correct method of calculation for the interest accrued as of December 31 of the same year on each of the notes described?

Which of the following statements about loan terminology is correct?

A company receives $102,000 when it issues a bond with a face value of $100,000 and a stated interest rate of 7%.Which of the following statements is correct?

Which one of the following accounts would not necessarily be classified as a current liability?

Pearly Gates Inc.has a debt-to-assets ratio of 0.55.This means that:

When bonds are issued at a premium,the bond issuer receives more cash on the issue date than it repays at maturity.The difference,a premium,is a reduction in the cost of borrowing,which has to be:

The journal entry to record the issuing of 100 bonds at their $1,000 face value will include a debit to and a credit to :

A company would record an entry with a debit to Bonds Payable and a credit to Cash on a bond's:

A company purchased equipment by issuing a $200,000,one-year,8% note payable.The transaction would be recorded in the accounting records with a credit to Notes Payable for:

Amortizing a bond discount will the discount balance and the carrying value of the bond so that when the bond matures the carrying value will __ the face value.

When the amount of a contingent liability can be reasonably estimated and its likelihood is possible but not probable,the company should:

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 10: Reporting and Interpreting Liabilities

If ABC Company receives $100,000 cash in exchange for issuing 100 bonds at their $1,000 face value,the transaction will be recorded with a:

A company issued $100,000 5-year,7% bonds and received $101,137 in cash.The market rate of interest when the bonds were issued was 6.5%.What is the amount of interest expense to be recorded for the first annual interest period if the company uses simplified effective-interest amortization?

ABC Airlines collects $300 for a roundtrip ticket from Chicago to Los Angeles.The flights will not occur until the next accounting period.How does ABC Airlines record the $300 collected in advance?

The law requires ______ to pay FICA taxes.

If a company forgets to record the journal entry to accrue interest expense,then its net income is too ______ and its liabilities are too ______:

If the market rate of interest is 6%,a $10,000,10-year bond with a stated annual interest rate of 8% would be issued at an amount:

If the market rate exceeds the stated interest rate,a bond will sell at a premium.

The following 12%,$1,000 notes were issued on December 1.Which of the following is the correct method of calculation for the interest accrued as of December 31 of the same year on each of the notes described?

Which of the following statements about loan terminology is correct?

A company receives $102,000 when it issues a bond with a face value of $100,000 and a stated interest rate of 7%.Which of the following statements is correct?

Which one of the following accounts would not necessarily be classified as a current liability?

Pearly Gates Inc.has a debt-to-assets ratio of 0.55.This means that:

When bonds are issued at a premium,the bond issuer receives more cash on the issue date than it repays at maturity.The difference,a premium,is a reduction in the cost of borrowing,which has to be:

The journal entry to record the issuing of 100 bonds at their $1,000 face value will include a debit to ______ and a credit to ______:

A company would record an entry with a debit to Bonds Payable and a credit to Cash on a bond's:

A company purchased equipment by issuing a $200,000,one-year,8% note payable.The transaction would be recorded in the accounting records with a credit to Notes Payable for:

Amortizing a bond discount will ______ the discount balance and ______ the carrying value of the bond so that when the bond matures the carrying value will ______ the face value.

When the amount of a contingent liability can be reasonably estimated and its likelihood is possible but not probable,the company should:

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Fraud, Internal Control, and Cash

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

If a company forgets to record the journal entry to accrue interest expense,then its net income is too and its liabilities are too :

The journal entry to record the issuing of 100 bonds at their $1,000 face value will include a debit to and a credit to :

Amortizing a bond discount will the discount balance and the carrying value of the bond so that when the bond matures the carrying value will __ the face value.