1) A company issued five-year, 7% bonds with a par value of $325,000. The company received $318,175 for the bonds. Using the straight-line method, the amount of interest expense for the first semiannual interest period is:

A) $10,692.50 B) $11,375.00 C) $12,057.50 D) $22,750.00 E) $24,115.00

2) A company issued five-year, 7% bonds with a par value of $475,000. The market rate when the bonds were issued was 6.5%. The company received $540,075 cash for the bonds. Using the straight-line method, the amount of recorded interest expense for the first semiannual interest period is:

A) $10,117.50 B) $16,625.00 C) $18,902.62 D) $37,805.25 E) $33,250.00

3) A company issues 7%, 20-year bonds with a par value of $800,000. The current market rate is 7%. The amount of interest owed to the bondholders for each semiannual interest payment is.

A) $0 B) $28,000 C) $56,000 D) $800,000 E) $1,600,000

4) A company issues bonds at par on June 1. These 7% bonds have a par value of $1,200,000 and pay interest annually. How much total cash interest is on June 1 by the bond issuer?

A) $0 B) $7,000.00 C) $240,000.00 D) $35,000.00 E) $84,000.00

5) On December 1, Martin Company signed a $3,600, 4-month, 7% note payable, with the principle plus interest due on March 1 of the following year. What amount of interest expense is accrued at December 31 on the note?

A) $0 B) $21 C) $36 D) $84 E) $252

6) A company purchased property for $100,000. The property included a building, a parking lot and land. The building was appraised at $61,500; the land at $44,500 and the parking lot at $17,900. The value of the land that will be included in the accounting record is:

A) $0

B) $35,916

C) $41,500

D) $44,500

E) $100,000

7) When originally purchased, a vehicle had an estimated useful life of eight years. The vehicle cost $24,110 and its estimated salvage value is $1,950. After four years of straight-line depreciation, the asset's total estimated useful life was revised from eight years to six years and there was no change in the estimated salvage value. The depreciation expense in year 5 equals:

A) $5,540.00

B) $2,770.00

C) $6,027.50

D) $11,080.00

E) $3,013.75

8) Company A and Company B each borrow $3,300 from the bank. Company A signed a 60-day, 10% note. Company B signed a 90-day, 8% note. How will each of these companies record these events in their respective general journals on the day the money was borrowed?

A) Company A

Cash	3,300
Notes payable		3,300

Company B

Cash	3,300
Notes payable		3,300

B) Company A

Cash	3,355
Interest expense		55
Notes payable		3,300

Company B

Cash	3,366
Interest expense		66
Notes payable		3,300

C) Company A

Notes payable	3,300
Cash		3,300

Company B

Notes payable	3,300
Cash		3,300

D) Company A

Interest expense	55
Notes payable	3,300
Cash		3,355

Company B

Interest expense	55
Notes payable	3,300
Cash		3,355

E) Company A

Cash	3,355
Notes payable		3,355

Company B

Cash	3,366
Notes payable		3,366

9) Buyer Company asks to extend its past due $760 account payable to Seller Company. Seller Company agrees to accept $180 cash and a 30-day, 10%, $580 note payable to replace the account payable. How does Buyer Company record this event in the general journal?

A)

Accounts payable	760
Cash		180
Notes payable		580

B)

Accounts payable	580
Cash		180
Notes payable		760

C)

Cash	180
Accounts payable		180

D)

Accounts payable	180
Cash		180

E)

Buyer Company has no entry to record for this transaction.