Exam 10: Reporting and Interpreting Liabilities

On October 1,Angelica Inc.signs a note for $200,000 to provide the funds needed to build a new facility.The note is due in 10 years,includes an annual interest rate at 7%,and requires semiannual interest payments each April and October.The journal entry to record the issuance of the promissory note should debit:

Which of the following statements about payroll liabilities is correct?

American Co.sold $100,000 of bonds for an issue price of 98.As a result of selling these bonds,its total assets increase by:

The account entitled Premium on Bonds Payable:

A one-year,$15,000,12% note is signed on April 1.If the note is repaid on September 1 of the same year,how much interest expense is incurred?

The issue price of a bond is:

Your company is planning to issue $1,000 bonds with a stated interest rate of 7% and a maturity date of July 15,2022.If interest rates rise in the economy so that similar financial investments pay 9%,your company will:

Some bonds allow the borrower to repay the bond by issuing stock.These bonds are known as:

On October 1,2015,United Co.negotiates with its bank to borrow $10,000 cash on a one-year note.The bank charges 5% interest.Interest payments are to be made in two installments,on March 31 and September 30.The principal is to be repaid on September 30,2016,the maturity date.What adjusting entry needs to be recorded of December 31,2015?

On January 1,XYZ Corporation issued $200,000 of 8%,5year bonds when the market rate of interest was 6%.The bonds were issued for $216,849 and interest will be paid annually on December 31.How much premium amortization will XYZ record on the first interest payment date using the effective-interest method?

A company retires its bonds with a face value of $100,000 at 105.The carrying value of the bonds at the retirement date is $103,745.The journal entry to record this retirement will include a:

A company receives $95 for merchandise sold to a consumer of which $5 is for sales tax.The $5 of sales tax:

A company issues a 5-year bond with a $7,500 discount.Using straight-line amortization,the company should:

ABC Corp.issued $100,000 of bonds at a premium; as a result,the company:

Bobby Darling is the only employee of Atlantic Records, Inc.During the first week of January, Darling earned $800 and had federal and state income tax withholdings of $40 and $15, respectively.FICA taxes are 7.65% on earnings up to $117,000.State and federal unemployment taxes for the period are $50 and $8, respectively. -Use the information above to answer the following question.What is the employer's payroll tax expense for the week?

Which of the following misstatements would cause the debt-to-assets ratio to be overstated?

On January 1,2016,a company issues 3-year bonds with a face value of $200,000 and a stated interest rate of 8%.Because the market interest rate is higher than the stated interest rate,the company receives $194,000 for the bond. Required: Part a.Determine the amount of the discount that will be amortized during the year ending December 31,2016. Part b.Prepare the journal entry to record the first interest payment on December 31,2016.

When a company issues bonds that include no periodic interest payments,the bonds are referred to as "zero-coupon" bonds.

A company had total assets of $400,000 and a debt-to-assets ratio was 0.35.Which of the following statements is not true?

When a company issues bonds that do not pay periodic interest,the bonds are called: