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In: Accounting

Question 1 For many companies, current liabilities include accounts payable interest payable short-term notes payable all...

Question 1

For many companies, current liabilities include

accounts payable

interest payable

short-term notes payable

all of the above

Question 2

A company issues a $15,000, 5.5% note due in 90-days. How much interest will be due at maturity? (Use a 360-day year. Round answers to two decimal places.)

$825.00

$206.25

none of the above

Question 4

See the previous question. On August 30, the due date of the account payable, what entry would our company make if they paid the account in full?

Notes Payable              900,000
       Purchase Discount                    9,000
       Cash                                891,000     

Accounts Payable            900,000
       Cash                                900,000     

Accounts Payable            891,000
Purchase Discount             9,000
       Cash                                900,000     

Question 5

Convertible bonds may be ____.

Retired early at the option of the issuing corporation

Retired early at the option of the investor

Converted into common stock at the option of the investor

Question 6

Bonds payable are usually classified under ____.

Contingent liabilities

Long-term liabilities

Only in the notes to the financial statements

Question 7

A(n) ____ is a series of cash payments or receipts spaced equally in time.

present value

annuity

Premium

Question 8

If the market rate is HIGHER than the contract rate, the bonds will sell at ____.

A premium

A discount

Face amount

Question 16

A long term liability is a debt that can reasonably expected to be paid

between 6 months and 18 months.

out of current years revenues.

at a period of time longer than one year.

Question 22

Bonds with a face amount $700,000, are sold at 102. The entry to record the issuance is

Cash                                                          700,000
Premium on Bonds Payable                             14,000
       Bonds Payable                                  714,000

Cash                                                          714,000
       Premium on Bonds Payable                                      14,000
       Bonds Payable                              700,000

Cash                                                        714,000
       Discount on Bonds Payable                                       14,000
       Bonds Payable                  700,000

Question 25

For many companies, current liabilities include

accounts payable

accounts receivable

short-term notes payable

‘a’ and ‘c’ only

Solutions

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