$6.$ On July $1,2023,$ Smith Industries signed a $$145,000,$ one$-$year, $6$ percent note payable. The principal and interest will be paid on June $30,2024.$ How much interest expense should be reported on the income statement for the year ended December $31,2023?$

Multiple Choice

$$0$

$$1,305$

$$4,350$

$$8,700$

$7.$ Which of the following does not correctly describe an adjusting journal entry that debits depreciation expense and credits accumulated depreciation?

Multiple Choice

The entry increases expenses and increases assets.

The entry decreases net income and decreases assets.

The entry increases expenses and decreases retained earnings.

The entry decreases assets and decreases net income.

$8.$ On January $1,2023,$ the general ledger of Hermoso Company included supplies of $$2,500.$ During $2023,$ supplies purchased amounted to $$12,500.$ A physical count of inventory on hand at December $31,2023$ determined that the amount of supplies on hand was $$3,000.$ How much is the supplies expense for year $2023?$

Multiple Choice

$$15,000$

$$13,000$

$$12,000$

$$2,500$

$9.$On December $31,2023,$ Vivid Corporation prepared adjusting entries that included the following items:

Depreciation expense: $$26,000.$

Accrued sales revenue: $$24,000.$

Accrued expenses: $$16,000.$

Used insurance: $$3,000$; the insurance was initially recorded as prepaid.

Rent revenue earned: $$1,000$; the rent was initially prepaid by the tenant and credited to unearned rent revenue.

If Vivid Corporation reported pretax income of $$180,000$ prior to the adjusting entries, how much is Vivid's pretax income after the adjusting entries?

Multiple Choice

$$163,000$

$$162,000$

$$160,000$

$$179,000$

$10.$Assume Idaho Company recorded the following adjusting journal entry at year$-$end:

Account Title Debit Credit

Insurance expense $2,000$

Prepaid insurance $2,000$

If the beginning balance in prepaid insurance was $$500,$ and $$2,500$ was paid for an insurance premium during the year, what is the ending balance in the prepaid insurance account after the above adjusting entry?

Multiple Choice

$$1,200$

$$700$

$$2,200$

$$1,000$