Question

When determining the amount of interest to be paid on a bond, which of the following information is not necessary?

a.The length of the interest period, annually or semiannually.

b.The face rate of interest on the bonds.

c.The selling price of the bonds.

d.The face amount of the bonds.

Which of the following statements is correct?

a.The market rate of interest has no bearing on the selling price of the bonds.

b.The actual issue price of a bond represents the present value of all future cash flows related to the bond.

c.If the face rate of interest on a bond is not equal to the market rate of interest, then the company desiring to issue the bonds must reprint its bond certificates.

d.Bonds are issued at a price that reflects the stated rate of interest on the day the bond is purchased.

Proctor Inc. has a weekly payroll of $8,000 for a 5-day workweek, Monday through Friday. If December 31, the last day of the accounting year, falls on Wednesday, Proctor would make an adjusting entry that would

a.increase wages payable $8,000.

b.increase wages expense $4,800.

c.decrease wages payable $4,800.

d.decrease cash $4,800.

Marsh Corporation borrowed $90,000 by issuing a 12%, six-month note payable, all due at the maturity date. After one month, the company's total liability for this loan amounts to:

a.$90,450

b.$91,800

c.$90,000

d.$90,900

On November 1, Greenfield Corporation borrowed $55,000 from a bank and signed a 12%, 90-day note payable in the amount of $55,000. If you assume 360 days in year, the November 30 adjusting entry will be:

a.Debit Interest Expense $550 and credit Interest Payable $550.

b.Debit Interest Expense $550 and credit Notes Payable $550.

c.Debit Interest Expense $550 and credit Cash $550.

d.Debit Discount on Notes Payable $1,100 and credit Interest Payable $1,100.

Answer 1

1-	When determining the amount of interest to be paid on a bond, which of the following information is not necessary	selling price of bond
2-	Which of the following statements is correct	b.The actual issue price of a bond represents the present value of all future cash flows related to the bond.
3-		b.increase wages expense $4,800.
4-	90000+(90000*12%*1/12)	d.$90,900
5-	550	a.Debit Interest Expense $550 and credit Interest Payable $550.