1. A contingent liability is:

1. always a specific amount.
2. an obligation arising from the purchase of goods or services on credit.
3. an obligation not requiring a future payment.
4. a potential obligation that depends on a future event.

2. On January 1, Weldon Weston Co. purchased equipment for $250,000. It has an estimated useful life of five years and its residual value is $25,000. The company has a calendar year-end. Using the straight-line method, depreciation expense for the first year of its life equals:

3. Fwp Co. issued $100,000, 10-year bonds on January 1, 2013. The stated rate of interest on the bonds is 10% payable annually on 12/31. Provide the requested information for the bonds immediately after issuance (January 1, 2013) under each of the three independent scenarios described below :