16. Alliance Products purchased equipment that cost $120,000. It had an estimated useful life of four years and no residual value. The equipment was depreciated by the straight-line method and was sold at the end of the third year of use for $25,000 cash. Abbott should record: a. A gain of $5,000. b. A loss of $5,000. c. Neither a gain nor a loss since the computer was sold at its book value. d. Neither a gain nor a loss since the gain would not be recognized.

17. On November 1, 2015, The Bagel Factory signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2016. The Bagel Factory should report interest payable at December 31, 2015, in the amount of: a. $0. b. $1,000. c. $2,000. d. $3,000. 5 / 10

18. For a bond issue that sells for more than the bond face amount, the stated interest rate is: a. The actual yield rate. b. The prime rate. c. More than the market rate. d. Less than the market rate.

19. Bonds payable should be reported as a long-term liability in the balance sheet at: a. Face Value. b. Current bond market price. c. Carrying value. d. Face value less accrued interest since the last interest payment date.

20. Outstanding common stock refers to the total number of shares: a. Issued. b. Issued plus treasury stock. c. Issued less treasury stock. d. Authorized.