A company issued 7%, 5-year bonds with a par value of $65,000. The market rate when the bonds were issued was 8%. The company received $62,366 cash for the bonds. Using the effective interest method, the amount of interest expense for the first semiannual interest period is:

Multiple Choice

• $4,550.00.

• $4,989.28.

• $2,600.00.

• $2,275.00.

• $2,494.64.

A company pays each of its two office employees each Friday at the rate of $270 per day for a five-day week that begins on Monday. If the monthly accounting period ends on Tuesday and the employees worked on both Monday and Tuesday, the month-end adjusting entry to record the salaries earned but unpaid is:

Multiple Choice

• Debit Salaries Expense $1,080 and credit Salaries Payable $1,080.

• Debit Salaries Expense $1,620 and credit Salaries Payable $1,620.

• Debit Salaries Payable $1,080 and credit Salaries Expense $1,080.

• Debit Salaries Expense $1,080 and credit Cash $1,080.

• Debit Unpaid Salaries $1,620 and credit Salaries Payable $1,620.