Exam 11: Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

A bond is sold for an amount equal to its face value.Which of the following statements would explain why?

A bond is sold for an amount less than its face value.Which of the following statements would explain why?

If a company issues a bond in-between interest payments,the company can pay a prorated portion of the interest payment on the regular payment date.

On November 1,2015,Archangel Services issued $200,000 of 10-year bonds with a stated rate of 3%.The bonds were sold at par,and make semiannual payments on April 30 and October 31.At December 31,2015,Archangel made an adjusting entry to accrue interest at year-end.How much interest expense will be recorded at December 31,2015?

On January 1,2013,Thames Company purchases property and signs a 6-year mortgage note $60,000 at 4%.Please see the partial amortization schedule below. - At the end of 2013,what amount would be shown on the balance sheet for current portion of mortgage payable?

Blanding Company issues $1,000,000 of 8%,10-year bonds at 98 on February 28,2014.The bond pays interest on February 28 and August 31.The market rate of interest on the issuance date was 10%.Assume Blanding uses the straight-line method for amortization.The journal entry to record the first interest payment on August 31,2014 would be a:

On November 1,2012,EZ Products borrowed $48,000 on a 5%,10-year note with annual installment payments of $4,800 plus interest due on November 1 of each succeeding year. -How much interest expense should be accrued at December 31,2012 for the period of November 1 through year-end?

McDonald Sales prepared a bond issue of $20,000 dated January 1,2013.The bonds have a stated rate of 3% and a term of 6 years.The bond issue was delayed,and the bonds were finally sold on March 1,2013 at par.Please provide the journal entry for the issue of the bonds on March 1,2013.

If bonds with a face value of $100,000 are sold at 88,the amount of cash proceeds is:

The interest rate on which cash payments to bondholders are based is the:

On November 1,2015,Archangel Services issued $200,000 of 10-year bonds with a stated rate of 3%.The bonds were sold at discount for $191,000,and make semiannual payments on April 30 and October 31.At December 31,2015,Archangel made an adjusting entry to accrue interest at year-end.No further entries were made until April 30,2016 when the first interest payment was made.How much interest expense will be recorded for the period of January through April,2016?

On January 1,2013,Davie Services issued $20,000 of 8% bonds that mature in five years.They were sold at par.The bonds pay semiannual interest payments on June 30 and December 31 of each year.Please provide the journal entry for the payment made on June 30,2013.

Paris Company buys a building on a plot of land for $100,000,paying $20,000 cash and signing a 20-year mortgage note for $80,000 at 6%.Monthly payments are $570. -The first monthly payment was made in January,2013.After the first payment,what is the updated principal balance?

A bond is sold for an amount higher than face value.Which of the following statements would explain why?

Premium on bonds payable is considered to be additional interest expense of the company that issues the bond.

The time value of money is related to which of the following concepts?

On November 1,2013,Archangel Services issued $200,000 of 10-year bonds with a stated rate of 3%.The bonds were sold at par,and make semiannual payments on April 30 and October 31.At December 31,2013,Archangel made an adjusting entry to accrue interest at year-end.Please provide that journal entry.

Paris Company buys a building on a plot of land for $100,000,paying $20,000 cash and signing a 20-year mortgage note for $80,000 at 6%.Monthly payments are $570.The first monthly payment was made in January,2013.Please provide the journal entry for the first monthly payment.

The market rate is the rate used to calculate the actual cash payments made to bondholders.

Please refer to the following list of liability balances. Accounts payable \ 12,000 Employee benefits payable 360 Employee income tax payable 190 Interest payable 1,300 Estimated warranty payable 2,600 Long-term notes payable 32,000 FICA tax payable 590 Sales tax payable 370 Long-term notes payable 4,000 Bond payable 50,000 Current portion of long-term notes payable 2,000 - What is the total amount of current liabilities?