A bank loaned Wesley Company $10, 000 on a 1-year, 6% note, but deducted the interest in advance. The journal entry made by Wesley to record receipt of the cash would include: An increase in cash for $9,400 An increase in cash for $600 A decrease in notes payble for $10,600 A decrease in notes payble for $9,400 Boehner Inc. has a weekly payroll of $8,000 for a 5-day workweek, Monday through friday. If December 31, the last day of the accounting year, falls on Wednesday, Boehner would make an adjusting entry that would. increase wages expense $4,800 decrease wages payable $4,800 decrease cash $4,800 increase wages payable $8,000. A Firm is required to estimate a liability for repairs for products sold with a warranty. If the firms's accountants later find that the easimated amount for repairs has been overstated, the correct accounting procedure is to make an adjusting entry to reduce the amount of estimate make a correcting entry because the overstatement is an error. show the amount of overstatement on the income statement as a loss. do nothing for the year in question and modify the next year's estimate. Don wins the lottery. He wins $20,000 per year to be paid to him for 10 years. The state offers him the choice of a cash settlement now instead of the annual payments for 10 years. If the interest rate is 6%, What is the amount the state will offer for a settlement today? $147,200 $175,000 $154,440 $200,000 Quiney Jones Company is a defendant in a lawsuit alleging damages of $3 billion. The litigation is anticipated to continue for several years, but no reasonable estimate can be made at this time regarding ultimate financial responsibility. This situation is an example of: An $3 billion expense to be recorded in the income statement during the year of the suit. A loss contingency that should be disclosed in the notes to Quiney's financial statements. An estimated liability that must appear in Quiney Jones Company's balance sheet. None of these. No accural or disclosure is required in Quiney's financial statements. A convertible bond is one where the issuer can convert from a fixed interest rate to a floating one. the issuer can convert it from long-term to short-term. the issuer can retire the bond before its specified due date. the holder can convert the bond into common stock at a future time. Bonds in the amount of $100,000 and a life of 10 years were issued by the Roundy Company. If the face rate is 6% and interest is paid semiannually, what would be the total amount of interest paid over the life of the bonds? $60,000 $30,000 $120,000 $6,000