1. Happy Corporation leased a building from Sensor Company. The ten-year lease is recorded as a capital lease. The annual payments are $10,000, and the recorded cost of the asset is $67,100. The straight-line method is used to calculate depreciation. Which of the following statements is true? a. Depreciation expense of $6,710 will be recorded each year. b. Depreciation expense of $10,000 will be recorded each year. c. No depreciation expense will be recorded by Happy Corporation. d. No interest expense will be recorded by Happy Corporation.

2. In 2017, Aspinwall Company issued $200,000 of bonds for $175,000. If the face rate of interest was 9% and the effective rate of interest was 7.99%, how would Aspinwall calculate the interest expense for the first year on the bonds using the effective interest method? a. $175,000 7.99% b. $175,000 9% c. $10,000 7.99% d. $10,000 9% 3.

Use the information below for Focal Point Corp. for 2017 and 2018 to answer the following question: Retained earnings, December 31, 2017 $300,000 Retained earnings, December 31, 2018 345,000 Dividends payable, December 31, 2017 19,000 Dividends payable, December 31, 2018 29,000 Net income2018 150,000

Assume that there were no retained earnings transactions other than those dealing with dividends and net income. How much dividends did Focal Point declare during 2018? a. $95,000 b. $105,000 c. $140,000 d. $150,000