1. A loss on disposal of a plant asset is reported in the financial statements You must provide your work for all calculations to receive credit. ADin the Other Expenses and Losses section of the income statement. B) in the Other Revenues and Gains section of the income statement. C) as a direct increase to the capital account on the balance sheet. D) as a direct decrease to the capital account on the balance sheet. 2. If the market interest rate for a bond is lower than the stated interest rate, the bond will sell at a a premium. b. a discount. c. par. d. either a discount or premium. 3. The total cost of borrowing is increased only if the A) bonds were issued at a premium. (B) bonds were issued at a discount. C) bonds were sold at face value. D) market interest rate is less than the contractual interest rate on that date. 4. A company purchased factory equipment on March 31, 2023 for $8,000. It is estimated that the equipment will have a $500 salvage value at the end of its 5-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2023 is A) $7,500. B) $1,125. C) $6,875. D) $5,625. 5. If a company fails to prepare an adjusting entry to estimate bad debts, A) net income is overstated and cash realizable value is overstated. B) expenses are understated and assets are understated. C) expenses are understated and net realizable value is understated. D) net income is overstated and assets are understated. 6. A high accounts receivable turnover ratio indicates A) the company's sales are decreasing. B) the company's credit sales are increasing. C) customers are making payments very slowly. Gustomers are making payments quickly.