1. Under ASPE, a lease is generally classified as a capital lease if the lease term is equal to ________ or more of the economic life of the leased property.

Select one:

A.90%

B.75%

C.100%

D.25%

2.Dividends are tax deductible by the company.

Select one:

True

False

The ratio that measures the percentage of total assets provided by creditors is the

Select one:

A.interest coverage ratio.

B.debt to total assets ratio.

C.receivables turnover ratio.

D.return on assets ratio.

One of the differences between notes payable and bonds payable is that most notes are payable in a series of periodic payments, while bonds are normally repayable in full at maturity.

Select one:

True

False

Under ASPE, a lease arrangement where the lessor transfers substantially all risks and benefits of ownership, the lease should be classified as an operating lease.

Select one:

True

False

A corporation issued $200,000, 10%, 5-year bonds on January 1, 2021 for $216,222, which reflects an effective-interest rate of 8%. Interest is paid semi-annually on January 1 and July 1. The amount of bond interest expense to be recognized on July 1, 2021, is

Select one:

A.$8,000.

B.$10,811.

C.$8,649.

D.$10,000.