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90. Which of the following is not considered a long-term obligation? A. Contributed capital.B. Deferred income taxes.C. Capital lease.D. Pension liabilities. 91. On January 2, 20x5, Clair Inc. signed a 9% mortgage payable for $200,000 with equal monthly payments of $2,400.  When Clair makes the first payment, how much interest expense will be recorded? A. $0B. $1,500.C. $18,000.D. $750. 92. On January 2, 20x5, Clair.
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160. Bonds that contain a provision that allows the issuing corporation to buy back the bonds prior to the maturity date are called A. secured bonds.B. callable bonds.C. convertible bonds.D. debenture bonds. 161. When bonds payable are converted into stock, the carrying value of the bonds should be A. credited to Retained Earnings.B. credited to contributed capital accounts.C. debited to Retained Earnings.D. debited.
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220. On December 31, 20x5, the balance sheet of Dennis, Inc. reported bonds outstanding with a face value of $500,000 and a related unamortized premium of $25,000. Interest is payable semiannually on January 1 and July 1.a. Prepare an entry in journal form without explanations to record the retirement of bonds.
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140. Lassen Corporation issued ten-year term bonds on January 1, 20x5, with a face value of $800,000. The face interest rate is 8 percent and interest is payable semi-annually on June 30 and December 31. The bonds were issued for $690,960 to yield an effective annual rate of 10 percent. The.
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51. The effective interest method produces a constant dollar amount of bond interest expense to be reported each interest period.  52. The calculation of cash for interest to be paid each interest period in connection with a bond payable is not influenced by any premium or discount upon issuance.  53. The amount of unamortized discount.
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177. The following totals for the month of May were taken from the payroll register of the Hillview Company: Salaries (all subject to Social Security and Medicare taxes) $14,000 Federal income taxes withheld 3,500 Medical insurance deductions 700 Life insurance deductions 400 Salaries subject to unemployment taxes 11,000 Prepare journal entries to record the following, omitting explanations and rounding amounts to the.
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120. On January 2, 20x5, Preston Corporation issued 20-year bonds payable with a face value of $300,000 and a face interest rate of 8 percent. The bonds were issued to yield a market interest rate of 9 percent. Interest is payable semi-annually on January 1 and July 1. In calculating the.
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41. Issuing bonds at a discount has the effect of increasing interest expense above the face amount of interest.  42. A bond discount is a component of interest cost because it represents the amount in excess of the issue price that a corporation must pay on the maturity date.  43. Total interest cost for a.
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100. If bonds are issued at a premium, the face interest rate is A. lower than the market rate of interest.B. higher than the market rate of interest.C. too low to attract investors.D. adjusted to a higher effective rate of interest. 101. An unsecured bond is the same as a A. term bond.B. zero coupon bond.C. debenture bond.D. bond indenture. 102. A corporation issues bond.
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71. Leases of short-term assets are operating leases, and leases of long-term assets are capital leases.  72. A capital lease is a lease of property, plant, or equipment that is in effect an installment purchase.  73. Accounting for capital leases can be thought of as similar to accounting for mortgage payments.  74. Under a defined benefit pension.
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170. The amount of cash received on issuance of a 9 percent, $10,000 bond dated February 1 and issued June 1 at 96 is A. $9,300.B. $9,975.C. $9,600.D. $9,900. 171. Which of the following qualifies as a capital lease? A. Four-year cancelable lease on a company vehicle.B. One-year lease on a computer with an option to renew for one more year.C. Five-year.
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11. The call feature of bonds is useful if a company wants to retire a bond issue.  12. The call price of bonds is usually above face value.  13. The callable feature of a bond can be exercised by the bondholder.  14. The convertibility feature of a bond can be exercised by the issuing corporation.  15. Unamortized Bond Discount.
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74. A disadvantage of the corporate form of business is A. lack of mutual agency.B. professional management.C. ease of transfer of ownership.D. tax treatment. 75. A disadvantage of the corporate form of business is A. centralized authority and responsibility.B. its status as a separate legal entity.C. government regulation.D. continuous existence. 76. An advantage of the corporate form of business is A. separation of ownership and control.B. tax treatment.C. lack.
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21. Interest on bonds usually is paid monthly.  22. Bond certificates are issued to creditors of the issuing corporation.  23. Most bonds issued today are registered bonds rather than coupon bonds.  24. The par value of a bond is equal to its face value.  25. When all the bonds of an issue mature at the same time, they are.
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211. On January 1, 20x5, Becky Bishop Fashion Company issued ten-year, 8 percent bonds with a face value of $500,000. The semiannual interest dates are June 30 and December 31. The bonds were issued for $437,740 to yield an effective annual rate of 10 percent. The accounting year ends on December.
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202. Cruz Corporation purchased a warehouse by signing a long-term $1,600,000 mortgage with monthly payments of $12,400. The mortgage carries an interest rate of 9 percent. Prepare entries in journal form without explanations to record the purchase and the first two monthly payments. Round answers to the nearest dollar. General Journal Page 1 Date Description Post.Ref. Debit Credit 203. Jamie.
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84. Start-up and organization costs include all of the following except A. goodwill.B. cost of printing stock certificates.C. attorney's fees.D. state incorporation fees. 85. Start-up and organization costs A. are capitalized, but never amortized.B. are capitalized and amortized, usually over five years.C. are expensed in the year incurred.D. appear on the balance sheet as a current asset. 86. Which of the following is involved in.
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94. Use the following information to answer the question below.The following accounts appear in the ledger of Pepper Corporation on December 31, 20x5 Preferred Stock $60,000 Common Stock 116,000 Additional Paid-in Capital, Preferred 14,000 Additional Paid-in Capital, Common 36,000 Retained Earnings 80,000 A balance sheet prepared on December 31, 20x5 , would report total contributed capital of A. $176,000.B. $190,000.C. $226,000.D. $306,000. 95. Use the following information to.
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1. The board of directors carries out the day-to-day operations of the business.  2. Stockholders elect the board of directors who then appoint the officers of a corporation.  3. Limited liability can be viewed as both an advantage and a disadvantage.  4. Corporate earnings are subject to double taxation.  5. The par value of stock is an arbitrary amount.
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11. Financing a business with common stock is more risky than financing it with bonds.  12. Legal capital of a corporation is the maximum amount that can be reported as contributed capital.  13. Underwriters typically charge 1 percent of the selling price to guarantee the sale of initial public offerings of stock.  14. Start-up and organization costs.
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185. Reynaldo Company has current assets of $115,000 and current liabilities of $75,000 of which accounts payable are $65,000. Reynaldo's cost of goods sold is $420,000, its merchandise inventory increased by $20,000, and accounts payable were $45,000 the prior year. Calculate Reynaldo's working capital, payables turnover, and days' payable (to one.
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110. If Rex Corporation issued ten $1,000 bonds issued at 99.75 on the interest date, the entry to record this transaction is :  A. Cash                  990.75                 Bonds Payable                     990.75      B. Cash                  9,907.50                 Bonds Payable                  9,907.50      C. Cash                  997.50           .
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114. The sale of treasury stock cannot result in A. an increase in Retained Earnings.B. the crediting of Paid-in Capital, Treasury Stock.C. the debiting of Paid-in Capital, Treasury Stock.D. an increase in total stockholders' equity. 115. A company purchases 800 shares of its $50 par value common stock at $55 per share. It then reissues 120 shares at.
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61. The matching rule dictates that both the accrued interest and the amortization of a premium or discount be recorded at the year end.  62. When bonds are sold between the interest payment dates, the issuing corporation pays to investors the interest that has accrued since the last interest payment date.  63. Issuing bonds between.
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51. A stock dividend is a pro rata distribution of cash to a corporation's stockholders.  52. A small stock dividend normally results in a transfer from Retained Earnings to Contributed Capital of an amount equal to the market value of the stock.  53. A stock dividend increases the total amount of stockholders' equity.  54. The account Common.
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130. Pelican Company issued $200,000 of 20-year, 6 percent bonds at 98 on one of its semiannual interest dates. The straight-line method of amortization is to be used. After seven years, what is the carrying value of the bonds? A. $196,700B. $197,400C. $198,600D. $199,300 131. Pelican Company issued $200,000 of 20-year, 6 percent bonds at 98 on one.
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195. When bonds are converted to common stock, what is the basis for recording (valuing) the stock issued? 196. When bonds are issued between interest dates, the issuer collects from the investor the interest that would have accrued for the partial period preceding the issue date.  Describe two reasons why this procedure is.
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213. On November 1, 20x5, Scarlett Company issued $400,000 worth of ten-year, 9 percent bonds. The semiannual interest dates are November 1 and May 1. Because the market interest rate of similar investments was 8.5 percent, the bonds were issued at a price of 103. Ignoring year-end accruals, prepare entries in.
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185. When fixed mortgage payments are made, in what way does the interest portion change each month, and why? 186. Briefly describe each of the following type of bonds:1. Convertible bonds.2. Callable bonds.3. Debenture bonds.4. Serial bonds.5. Term bonds. 187. Briefly answer each of the following questions about bond issue costs:1. What type of cost.
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200. Match each of the following terms with its appropriate description. 1. The issuer has the right to buy back and retire the bonds before maturity at a specified price, usually above face value.      Mortgage. 2. A contract that defines the rights, privileges, and limitations of the bondholders.      Deferred income taxes. 3. A long-term debt secured by real property.      Bond.
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104. The par value of the common stock represents the A. amount entered into the corporation's Common Stock account when a share is issued.B. liquidation value of the stock.C. market value of a share of stock.D. amount the corporation received when the stock was issued. 105. In the rare instance when a par value stock is issued at.
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21. Retained earnings are a component of contributed capital.  22. The word preferred in the phrase preferred stock means that an owner of preferred stock has some advantages over a bondholder.  23. Dividends in arrears are disclosed as liabilities of a corporation.  24. Dividends in arrears pertain only to cumulative preferred stock.  25. Dividends in arrears on cumulative preferred.
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124. On the balance sheet, treasury stock owned by the company is classified properly as A. contra-stockholders' equity.B. current assets.C. investments.D. a note to the financial statements. 125. Which of the following is the appropriate entry to record the declaration of cash dividends? A. Dividends Payable - DebitCash - CreditB. Additional Paid-in Capital - DebitDividends Payable - CreditC. Dividends - DebitDividends Payable.
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222. Whitman Enterprises has $2,000,000 of 20-year, 9 percent bonds dated October 1, with interest payment dates of September 30 and March 31. The company's fiscal year ends July 31, and it uses the effective interest method to amortize premium or discount.a. Prepare entries in journal form for November 1, March.
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1. Bondholders are creditors of the issuing corporation.  2. Long-term notes and bonds have similar effects on the financial statements.  3. The distinction between current and long-term liabilities affects the evaluation of a company’s solvency.  4. Promises to pay employees pensions after they retire are difficult to identify and value and therefore need not be recognized in.
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81. Bondholders share voting rights with stockholders.  82. A corporation's bondholders are the primary recipients of financial leverage.  83. The debt to equity ratio is expressed in terms of dollars.  84. The lower the debt to equity ratio, the greater the financial risk the company is taking.  85. The interest coverage ratio measures the degree of protection a company.
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31. When no-par common stock without a stated value is issued for cash, the Common Stock account is credited for an amount equal to the cash proceeds.  32. When no-par common stock has a stated value, the stated value of the shares issued normally is considered the legal capital of the corporation.  33. A corporation.
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150. When bonds have been issued at a discount the periodic amortization of the discount will A. increase the carrying value of the bonds.B. have no effect on the carrying value of the bonds.C. decrease the carrying value of the bonds.D. cause the carrying value always to equal the face value of the bonds. 151. A company has.
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190. When determining the value of a bond using present value, what are the two components used in the calculation? 191. On January 1, 20x5, Ed Bradley Co. issued five-year term bonds with a face value of $700,000. Interest is payable annually on December 31. The bonds were issued for $727,300. The effective.
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61. A statement of stockholders' equity can take the place of a statement of retained earnings.  62. The date on a statement of stockholders' equity is for a specific point in time.  63. The effects on individual contributed capital accounts of a conversion of preferred stock to common stock during the period are disclosed on.
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216. Parker Company has $1,000,000 worth of 7 percent convertible bonds outstanding. On September 1, 20x5, there is $40,000 of unamortized discount associated with these bonds. The bonds are convertible at the rate of 30 shares of $10 par value common stock for each $1,000 bond. On September 1, 20x5, an.
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181. Calculate answers to the following scenarios using present value tables:a.       If $100 is deposited into an account paying 8 percent simple interest, what will be the value of the account in 5 years?b.       If an accumulation of $8,000 is desired at the end of 4 years, what amount.
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