Exam 12: Non-Current Liabilities,debentures Payable and Classification of Liabilities on the Balance Sheet

Blanding Company issues $1,176,000 of 16%,10-year debentures at 96 on 31 March 2017.The debentures pay interest on 31 March and 30 September.Assume that Blanding uses the straight-line method for amortisation.What net balance will be reported for the debentures on the balance sheet on 30 September 2017? (Round to the nearest dollar.)

(Multiple Choice)

4.9/5

(38)

Question 41

Trek Company signed a 9%,10-year note for $151,000.The company paid $2700 as the instalment for the first month.What portion of the first monthly payment is principal? (Round to the nearest dollar.)

(Multiple Choice)

4.8/5

(45)

Question 42

Interest payable would normally be shown on the balance sheet in current liabilities.

(True/False)

4.7/5

(37)

Question 43

When a long-term note payable is issued,the entire amount should be initially recorded as a long-term note payable.

(True/False)

4.9/5

(47)

Question 44

The current portion of notes payable must be reported on the balance sheet combined with the long-term portion under non-current liabilities.

(True/False)

4.8/5

(37)

Question 45

On 1 January 2017,Bratios Company purchased equipment and signed a 6-year mortgage payable for $160,000 at 15%.The mortgage will be paid in equal annual instalments of $42,278,beginning 1 January 2018.The journal entry to record the first instalment payment on 1 January 2018 will include a:

(Multiple Choice)

4.8/5

(35)

Question 46

On 1 December 2017,Fine Products borrowed $84,000 on a 5%,10-year note with annual instalment payments of $8400 plus interest due on 1 December of each succeeding year.Which of the following describes the first instalment payment made on 1 December 2018?

(Multiple Choice)

4.7/5

(47)

Question 47

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

(True/False)

4.8/5

(33)

Question 48

On 1 January 2017,Carter Sales issued $23,000 in debentures for $18,700.They were six year debentures with a stated rate of 10% and pay semiannual interest.Carter Sales uses the straight-line method to amortise the Debentures discount.Immediately after issue of the debentures,the ledger balances appeared as follows: After the first interest payment on 30 June 2017,what will be the balance in the Discount account?

(Multiple Choice)

4.9/5

(40)

Question 49

On 1 January 2017,Carter Sales issued $16,000 in debentures for $26,800.They were eight year debentures with a stated rate of 10%,and pay semiannual interest.Carter Sales uses the straight-line method to amortise the Debentures premium.Immediately after issue of the debentures,the ledger balances appeared as follows: After the first interest payment on 30 June 2017,what will be the balance in the Premium account? (Round to the nearest dollar.)

(Multiple Choice)

4.9/5

(38)

Question 50

When a debenture is sold,the selling price is generally equivalent to the present value of the debenture payments.

(True/False)

4.8/5

(38)

Question 51

On 1 January 2017,Zing Services issued $167,000 of six year debentures with a stated rate of 12%.The market rate at time of issue was 11%,so the debentures were issued with a premium and sold for $191,110.Zing uses the effective-interest method to amortise debentures premium.Half-yearly interest payments are made on 30 June and 31 December of each year.How much Interest expense will be recorded when the first interest payment is made? (Round to the nearest dollar.)

(Multiple Choice)

5.0/5

(44)

Question 52

Which of the following statements is TRUE about a debenture that is issued at a discount?

(Multiple Choice)

4.8/5

(41)

Question 53

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

(Multiple Choice)

4.9/5

(30)

Question 54

If a debenture's stated interest rate is the same as the market rate,which of the following is TRUE?

(Multiple Choice)

4.9/5

(38)

Question 55

On 1 January 2017,Carter Sales issued $27,000 in debentures for $33,800.They were eight year debentures with a stated rate of 14% and pay semiannual interest.Carter Sales uses the straight-line method to amortise the debenture premium.On 30 June 2017,when Carter makes the first payment to investors,how much will they report as Interest expense? (Round to the nearest dollar.)

(Multiple Choice)

4.7/5

(35)

Question 56

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

(Multiple Choice)

5.0/5

(37)

Question 57

On 31 December 2016,Lopez Sales has a Debentures payable balance of $75,000 and a Premium on debentures payable of $6000.On the balance sheet,how will this information be shown?

(Multiple Choice)

4.8/5

(37)

Question 58

Which of the following describes a term debenture?

(Multiple Choice)

4.8/5

(33)

Question 59

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

(True/False)

4.8/5

(35)

Question 60

Showing 41 - 60 of 87

Trek Company signed a 9%,10-year note for $151,000.The company paid $2700 as the instalment for the first month.What portion of the first monthly payment is principal? (Round to the nearest dollar.)

Interest payable would normally be shown on the balance sheet in current liabilities.

When a long-term note payable is issued,the entire amount should be initially recorded as a long-term note payable.

The current portion of notes payable must be reported on the balance sheet combined with the long-term portion under non-current liabilities.

On 1 January 2017,Bratios Company purchased equipment and signed a 6-year mortgage payable for $160,000 at 15%.The mortgage will be paid in equal annual instalments of $42,278,beginning 1 January 2018.The journal entry to record the first instalment payment on 1 January 2018 will include a:

On 1 December 2017,Fine Products borrowed $84,000 on a 5%,10-year note with annual instalment payments of $8400 plus interest due on 1 December of each succeeding year.Which of the following describes the first instalment payment made on 1 December 2018?

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

When a debenture is sold,the selling price is generally equivalent to the present value of the debenture payments.

Which of the following statements is TRUE about a debenture that is issued at a discount?

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

If a debenture's stated interest rate is the same as the market rate,which of the following is TRUE?

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

On 31 December 2016,Lopez Sales has a Debentures payable balance of $75,000 and a Premium on debentures payable of $6000.On the balance sheet,how will this information be shown?

Which of the following describes a term debenture?

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

The Role of Accounting in Decision Making

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Retailing Operations

Retail Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Non-Current Assets: Property, plant and Equipment, and Intangibles

Current Liabilities and Payroll

Partnerships

Companies: Formation and Shareholders Equity

Companies: Capital Management and the Income Statement

The Cash Flow Statement

The Framework of Accounting

Financial Statement Analysis

Introduction to Managerial Accounting and the Master Budget

Job Costing

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

Filters