38. A bond issue with a maturity value of $100,000 and a discount of $4,200 is retired at 102. What is the gain or loss on this transaction?

A. $6,200 gain

B. $4,200 gain

C. $2,000 gain

D. $4,200 loss

E. $6,200 loss

39. Which of the following is true in a small stock dividend?

A. Additional paid in capital is decreased by the new number of new shares multiplied by the difference between the market price and the par price per share

B. Common stock is increased by the new number of shares multiplied by the market value per share

C. Common stock is increased by the new number of shares multiplied by the par value per share

D. New shares issued are more than 25% of the corporations issued common stock

E. Retained earnings are decreased by the number of old shares multiplied times the market price per share

40. 100 shares of treasury stock were purchased at $60/share. 60 of these shares were sold six months later at $64/share. The other 40 shares were sold eight months later at $53/share. Which of the following would have occurred?

A. First entry: cash increased $6,000

B. Second entry: treasury stock increased $3,600

C. Second entry: cash decreased $3,840

D. Third entry: additional paid in capital increased $240

E. Third entry: retained earnings decreased $40

41. Tim Company had net income of $900,000 for 20X1. 100,000 common shares were issued and outstanding on January 1. Preferred dividends declared and paid were $80,000 for 20X1. 120,000 additional common shares were issued on April 1. What are the earnings per share for 20X1?

A. $2.92

B. $3.45

C. $3.64

D. $4.32

E. $5.00

42 - 43. Cash received for interest during X1 = $ 6,500. Cash paid for interest during X1 = $ 5,800. Interest payable at 1/1/X1 = $1,250; Interest payable at 12/31/X1 = $ 1,930; Interest receivable at 1/1/X1 = $1,500; Interest receivable at 12/31/X1 = ?; Unearned interest at 1/1/X1 = $2,370; Unearned interest at 12/31/X1 = $ 1,980; Prepaid interest at 1/1/X1 = ?; Prepaid interest at 12/31/X1 = $ 1,200. Interest revenue during X1 = $7,500; Interest expense during X1 = $ 6,800. What is Prepaid interest at 1/1/X1?

A. $320

B. $880

C. $1,520

D. $1,680

E. $1,880

43.(connected to question above) Cash received for interest during X1 = $ 6,500. Cash paid for interest during X1 = $ 5,800. Interest payable at 1/1/X1 = $1,250; Interest payable at 12/31/X1 = $ 1,930; Interest receivable at 1/1/X1 = $1,500; Interest receivable at 12/31/X1 = ?; Unearned interest at 1/1/X1 = $2,370; Unearned interest at 12/31/X1 = $ 1,980; Prepaid interest at 1/1/X1 = ?; Prepaid interest at 12/31/X1 = $ 1,200. Interest revenue during X1 = $7,500; Interest expense during X1 = $ 6,800. What is Interest receivable at 12/31/1/X1?

A. $110

B. $610

C. $890

D. $1,810

E. $2,110