11. Which of heilowin s tna of a cennent Lubilay A) It is a potential liability that depends on a future event B) It is an actual liability that is difficult to estimate. C) It is an actual liability that depends on a past event D) It is a liability resulting from a lawsuit settled in court 12. A corporation has been sued for product failures allegedly resalting in injaries to the Indivd lawsuit. The company's lawyers believe it is more than remote, but less than probuble, that the Lauit will ewualt i an actual liability. Which of the following actions should be taken by the commpany's managrment biging the A) The liability should be estimated and recorded as an expense. B) The situation should be described in a note to the financial statements C) The possible liability should be ignored D) Management should consider resigning 13-On March 1, 2018, Baker Services issued a 5%long-term notes payable forsumbpyable overa3yeartermin $8,000 annual principal payments on March 1 of each year plus interest, beginning Manch 1,2019.How will the notes payable be shown on the balance sheet dated December 31, 2018 A) $24,000 shown as current liability only B) $8,000 shown as current liability and $24,000 shown as long-term iability C) $8,000 shown as current liablity and $16,000 shown as long term liabilaty D) the entire $24,000 shown as long-term liability 14. Which of the following is the amount the borrower must pay back to the bondholders at maturity C) stated intenest valae D) principal amount A) market value B) present value 5. On January 1,2018, Bratios Company purchased equipment and signed asyear montgage note for $7,000a 15% The note will be paid in equal annual installments of $25,631, beginning Jamuary 1,2019.On January 1, 2019, the journal entry to record the first installment payment will include a(Round your answer to the nearest whole number.) A) debit to Mortgage Payable for $25,631 B) debit to Interest Expense for $14,550 C) credit to Cash for $11,081 D) credit to Mortgage Payable for $97,000 16. The amount of cash interest the issuer of bonds (borrower) pays each year is based on the C) stated interest rate D) effective interest rate A) market conditions on the day of payment B) market interest rate 17. Which of the following statements is true of a bond that is issued at a premium? A) The bond will be issued at an amount above face value. B) The stated interest rate is lower than the prevailing market interest rate C) At maturity, the bond will repay an amount that is greater than the face value. D) The bond will be issued at par 18. A bond is issued at discount when a bond's stated interest rate is A) equal to the market interest rate B) more than the effective interest rate C) less than the market interest rate D) more than the market interest rate