1. Signa issued 20,000 shares of $100, 3% Preferred Stock at $104 per share. Recording the issue will require which of the following?:*

A) A debit to Retained Earnings of $80,000

B) A credit to Paid in Capital in Excess of Par, Preferred Stock of $2,080,000

C) A credit to Paid in Capital in Excess of Par, Preferred Stock of $80,000

D) A debit to Preferred Stock, Par for $2,080,000

E) A credit to Cash for $2,080,000

2. In Year 1, Mount Inc. issued 100,000 shares of $1 par value common stock at $9 per share. In Year 2, they reacquired 10,000 shares at $8 per share. In Year 3 they re-issued 1,000 shares from treasury at $10 per share. If we are using the cost method to account for treasury stock, the entry to record the reissue in Year 3 will include a:*

A) debit to Paid in Capital, Treasury Stock of $2,000

B) debit to Retained Earnings of $2,000

C) credit to Paid in Capital, Treasury Stock of $1,000

D) credit to Paid in Capital, Treasury Stock of $2,000

E) debit to Retained Earnings, Treasury Stock of $1,000

3. Notley Inc. issued a 10% stock dividend on their $1 par common stock during the year when the market price was $12 per share and there were 100,000 shares issued and outstanding. The entry to record the declaration of this stock dividend would include a:*

A) debit to Cash of $120,000

B) debit to Retained Earnings of $110,000

C) credit to Common Stock, Par of $120,000

D) credit to Paid in Capital in Excess of Par, Common Stock of $110,000

E) credit to Dividends Payable of $120,000

4. The journal entry to record the exercise of stock options will include a:*

A) debit to common stock

B) credit to common stock

C) credit to cash

D) debit to compensation expense

E) debit to stock options payable

5. For a security to be classified as a "held to maturity" security, it must have certain qualities. Which of these is a quality needed to be classified as "held to maturity?":*

A) Maturity of original security must be more than two years.

B) Remaining maturity at the time of purchase must be more than two years.

C) The firm must have the ability and intent to hold it to maturity.

D) The investment must be an equity security.

E) The firm must intend to hold the security for a minimum of five years.

6. Kindore Co. purchased $100,000 of 10% bonds of Seldom Co. on January 1, 20X3, paying $94,025. The bonds mature in ten years and pay interest semi-annually on July 1 and Jan 1 each year. The discount provides an effective interest yield of 11%. Kindore Co. uses the effective interest method and plans to hold these bonds to maturity. What is the carrying value of the bonds atDecember 31, 20X3(rounded to the nearest whole dollar)?:*

A) $94,377

B) $94,196

C) $93,950

D) $93,854

E) $93,673

7. Kolbe Inc. uses the equity method for its 30% investment in Little Co. When Little Co. reports earnings for the year, Kolbe Inc. will:*

A) credit to Dividend Income

B) debit to Dividend Income

C) credit to Investment in Little Co.

D) debit to Investment in Little Co.

E) credit to Cash

8. On January 1, 20X2, Wilde Inc. purchased 40,000 shares of Knoll Co. common stock for $15.00 per share and appropriately classified the holding as an "available-for-sale" investment. At year-end 20X2, the fair value was $16 per share. In March of 20X3, Wilde Inc. sold 10,000 shares of Knoll Co. for $17.00 per share. What would Wilde Inc. report as a realized gain on the sale of Knoll stock in 20X3?:*

A) $40,000

B) $10,000

C) $11,000

D) $20,000

E) $17,000

9. Which of these is a criteria that would result in a lease being classified as anoperatinglease?:*

A) The present value of minimum lease payments are $49,000 and fair value is $50,500.

B) The lease term is 7 years and useful life of leased asset is 9 years.

C) The lease document grants title to the lessee upon payment of $1 at the end of the lease term.

D) The lease contract specifies that the lease can be cancelled with 60 days' notice.

E) The lease document indicates that it may be renewed for a second term.

10. If a lease is appropriately classified as a operating lease, which of these will be present in the financial statements regarding the leased asset?:*

A) A balance in the Lease Obligation in the liability section of the balance sheet

B) An amount for the Leased Asset in the asset section of the balance sheet

C) Rent Expense in the operating expenses of the Income Statement

D) Interest Expense in the non-operating expenses of the Income Statement

E) Depreciation of the Leased Assets in the operating expenses of the Income Statement