Question
A03.V.10.1 Principles of Accounting II Lesson 5 Question 1 of 40 2.5 Points The entry to record the issuance of a bond between interest payment
A03.V.10.1 Principles of Accounting II Lesson 5
Question 1 of 40
2.5 Points
The entry to record the issuance of a bond between interest payment dates will include a __________.
A. debit to Cash; credit to Bonds Payable; credit to Bonds Interest Payable
B. debit to Bonds Payable; credit to Cash
C. debit to Bond Interest Expense; credit to Bond Interest Payable
D. debit to Bond Interest Payable; credit to Bond Interest Expense
Question 2 of 40
2.5 Points
Bonds are issued for $80,000 at 12% on November 1. What is the adjusting entry on December 31?
A.
Bond Interest Expense | 1600 |
Bond Interest Payable | 1600 |
B.
Bond Interest Expense | 1200 |
Bond Interest Payable | 1200 |
C.
Bond Interest Expense | 1200 |
Bond Interest Payable | 1200 |
D.
Bond Interest Payable | 1600 |
Bond Interest Expense | 1600 |
Question 3 of 40
2.5 Points
On October 1, Indiana Company issued $10,000, 8%, five-year bonds at 98. What is the adjusting entry on December 31 using straight-line method?
A.
Bond Interest Expense | 800 |
Bond Interest Payable | 800 |
B.
Bond Interest Expense | 200 |
Bond Interest Payable | 200 |
C.
Bond Interest Expense | 190 |
Discount on Bonds Payable | 10 |
Bond Interest Payable | 200 |
D.
Bond Interest Expense | 210 |
Discount on Bonds Payable | 10 |
Bond Interest Payable | 200 |
Question 4 of 40
2.5 Points
Assume the following account balances immediately after an interest payment date:
Bonds Payable | $100,000 |
Premium on Bonds Payable | 5,000 |
If the bonds are retired immediately at a total cost of $104,000, the journal entry to record this event is __________.
A.
Cash | 104,000 |
Loss on Bond Retirement | 1,000 |
Premium on Bonds Payable | 5,000 |
Bonds Payable | 100,000 |
B.
Bonds Payable | 100,000 |
Premium on Bonds Payable | 5,000 |
Cash | 104,000 |
Gain on Bond Retirement | 1,000 |
C.
Bonds Payable | 100,000 |
Loss on Bond Retirement | 9,000 |
Premium on Bonds Payable | 5,000 |
Cash | 104,000 |
D. None of the above
Question 5 of 40
2.5 Points
A $1,000 bond quoted at 96.5 would sell for __________.
A. $1,000
B. $965
C. $96.50
D. none of the above
Question 6 of 40
2.5 Points
The entry to record the semiannual payment and amortization of the discount using the straight-line method on a 10%, $100,000, five-year bond issued at 97 would be to __________.
A. debit Bond Interest Expense $5,000; credit Cash $5,000
B. debit Bond Interest Expense $5,300; credit Cash $5,000; credit Discount on Bonds Payable $300
C. debit Bond Interest Expense $10,000; credit Cash $10,000
D. debit Bond Interest Expense $13,000; credit Cash $10,000; credit Discount on Bonds Payable $3,000
Question 7 of 40
2.5 Points
When a bond issued at face value is retired, the journal entry is __________.
A. debit Bond Interest Expense; credit Cash
B. debit Bonds Payable; credit Cash
C. debit Cash; credit Bonds Payable
D. debit Cash; credit Bond Interest Expense
Question 8 of 40
2.5 Points
The interest rate specified in the bond indenture is called the __________.
A. market rate
B. discount rate
C. contract rate
D. effective rate
Question 9 of 40
2.5 Points
Manning Corporation sells $200,000, 12%, ten-year bonds for 96 on January 1. Interest is paid on January 1 and July 1. Straight-line amortization is used. The entry to record the issuance of the bonds on January 1 is __________.
A.
Cash | 200,000 |
Bonds Payable | 200,000 |
B.
Cash | 200,000 |
Discount on Bonds Payable | 8,000 |
Bonds Payable | 192,000 |
C.
Cash | 192,000 |
Bonds Payable | 192,000 |
D.
Cash | 192,000 |
Discount on Bonds Payable | 8,000 |
Bonds Payable | 200,000 |
Question 10 of 40
2.5 Points
For a corporation, a premium on bonds results when __________.
A. the contract rate is greater than the market rate
B. the contract rate is less than the market rate
C. the face value is greater than the effective rate
D. none of the above
Question 11 of 40
2.5 Points
On October 1, Indiana Company issued $10,000, 8%, 5-year bonds at 102. What is the adjusting entry on December 31 using the straight-line method?
A.
Bond Interest Expense | 800 |
Bond Interest Payable | 800 |
B.
Bond Interest Expense | 200 |
Bond Interest Payable | 200 |
C.
Bond Interest Expense | 190 |
Premium on Bonds Payable | 10 |
Bond Interest Payable | 200 |
D.
Bond Interest Expense | 210 |
Premium on Bonds Payable | 10 |
Bond Interest Payable | 200 |
Question 12 of 40
2.5 Points
When interest payments are made on a bond issued at face value, the journal entry is __________.
A. debit Bond Interest Expense; credit Cash
B. debit Bonds Payable; credit Cash
C. debit Cash; credit Bonds Payable
D. debit Cash; credit Bond Interest Expense
Question 13 of 40
2.5 Points
A fund set up so that a bond can be retired at maturity is called a __________.
A. sinking fund
B. bond payable fund
C. stock fund
D. retirement fund
Question 14 of 40 2.5 Points A $1,000 bond quoted at 104 would sell for __________.
A. $1,104
B. $1,000
C. $104
D. $1,040 |
Bonds are issued for $10,000 at 8% on October 1. What is the adjusting entry on December 31?
A.
Bond Interest Expense | 800 |
Bond Interest Payable | 800 |
B.
Bond Interest Expense | 200 |
Bond Interest Payable | 200 |
C.
Bond Interest Payable | 200 |
Bond Interest Expense | 200 |
D.
Bond Interest Payable | 800 |
Bond Interest Expense | 800 |
Question 16 of 40
2.5 Points
On April 1, Braintree Corporation issued 10%, ten-year, $300,000 bonds at 106. The effective interest rate for these bonds is __________.
A. 10%
B. 9.43%
C. 4.7%
D. 5%
Question 17 of 40
2.5 Points
Miranda Corporation issued $200,000 of 12%, ten-year bonds for $220,000. The entry to record the issuance of the bonds includes a __________.
A. debit to Bonds Payable for $200,000
B. credit to Premium on Bonds Payable for $20,000
C. credit to Bonds Payable for $220,000
D. credit to Cash for $220,000
Question 18 of 40
2.5 Points
The sale and issuance of $400,000, 8% bonds with a market rate of 8% would involving debiting Cash for __________.
A. $432,000
B. $400,000
C. $368,000
D. $ 32,000
Question 19 of 40
2.5 Points
On April 1, Braintree Corporation issued 10%, ten-year, $300,000 bonds at face value. Interest dates are April 1 and October 1. The amount of cash paid out for interest during the current calendar year is __________.
A. $0
B. $15,000
C. $30,000
D. $31,000
Question 20 of 40
2.5 Points
A bond payable is similar to which of the following?
A. Accounts Payable
B. Accounts Receivable
C. Notes Payable
D. Cash
Question 21 of 40
2.5 Points
Trundle Corporation reported a net income of $40,000, depreciation expenses of $1,000, sales of additional common shares of $25,000, and a decrease in Accounts Payable of $8,000. Net cash flow from operating activities using the indirect method is __________.
A. $41,000
B. $32,000
C. $33,000
D. $58,000
Question 22 of 40
2.5 Points
The method of reporting cash flows from operating activities under which revenues and expenses on the income statement are adjusted to reflect the amount of cash received or expended for each item is the __________.
A. direct method
B. indirect method
C. combination method
D. adjustment method
Question 23 of 40
2.5 Points
Cost of merchandise sold for the year was $850,000. Inventories were $60,000 and $90,000 at the beginning and end of the year, respectively. There were no changes in accounts payable from the beginning to the end of the year. Cash payment for merchandise to be reported on the cash flow statement using the direct method is __________.
A. $850,000
B. $910,000
C. $940,000
D. $880,000
Question 24 of 40
2.5 Points
Carmen?s Candies? net income was $40,000. Accounts Receivable decreased by $30,000, Merchandise Inventory increased by $20,000, Accounts Payable decreased by $4,000, and Salaries Payable increased by $1,000. The net cash flow from operating activities using the indirect method is __________.
A. $33,000
B. $47,000
C. $53,000
D. $61,000
Question 25 of 40
2.5 Points
A statement of cash flows __________.
A. has three main sections: net cash flow from operating, investing, and financing activities
B. may be computed directly or indirectly
C. is a statement used to better understand the financing and investing activities
D. all of the above
Question 26 of 40
2.5 Points
Smith Corporation reported a net income of $54,000, depreciation expenses of $10,000, an increase in Accounts Payable of $3,000, and an increase in Accounts Receivable of $1,500. Under the indirect method, net cash flow from operating activities is __________.
A. $62,500
B. $59,500
C. $48,500
D. $65,500
Question 27 of 40
2.5 Points
Fidelity Furniture?s net income was $25,000. Accounts Receivable decreased by $18,000, Merchandise Inventory increased by $7,000, Accounts Payable increased by $4,000, and Salaries Payable decreased by $3,000. The net cash flow from operating activities using the indirect method is __________.
A. $57,000
B. $43,000
C. $37,000
D. $15,000
Question 28 of 40
2.5 Points
An inflow of cash from investing activities would be __________.
A. the issuance of stock
B. the sale of investment in equity securities
C. interest received on loans
D. the purchase of fixed assets
Question 29 of 40
2.5 Points
When preparing the statement of cash flows by the indirect method, if current liabilities increase the difference is __________.
A. added to net income
B. added to investments
C. deducted from net income
D. subtracted from investments
Question 30 of 40
2.5 Points
Transactions involving the purchase and sale of fixed assets would be considered __________.
A. buying and selling activities
B. financing activities
C. operating activities
D. investing activities
Question 31 of 40
2.5 Points
The balance of Supplies has decreased during the year. How would this event affect the statement of cash flows operations section?indirect method?
A. It is already included in the net income.
B. It would affect the operations section positively.
C. It would affect the operations section negatively.
D. Does not affect the cash flow from operations.
Question 32 of 40
2.5 Points
The activity that is probably the most important indicator of financial health is the net cash flow from __________.
A. buying and selling activities
B. financing activities
C. operating activities
D. investing activities
Question 33 of 40
2.5 Points
When using the direct method to determine the net cash flows from operating activities, major categories would not include __________.
A. cash received from customers
B. cash paid for salaries
C. cash paid for dividends
D. cash paid for inventory
Question 34 of 40
2.5 Points
Operating expenses other than depreciation for the year were $335,000. Prepaid expenses decreased by $7,000. Cash payments for operating expenses to be reported on the cash flow statement using the direct method would be __________.
A. $335,000
B. $342,000
C. $328,000
D. $7,000
Question 35 of 40
2.5 Points
The records of Ashley Boutique showed Net Loss, $30,000; Depreciation Expense, $25,000; and increase in Supplies on Hand, $5,000. The net cash flow from operating activities using the indirect method is __________.
A. $15,000
B. $20,000
C. ($10,000.
D. ($15,000.
Question 36 of 40
2.5 Points
Big Toy Corporation?s records show a profit of $30,000, depreciation expenses of $10,000, and cash dividends declared and paid of $5,000. The amount of cash used in operating activities using the indirect method is __________.
A. $40,000
B. $30,000
C. $20,000
D. $10,000
When preparing the statement of cash flows by the indirect method, if accumulated depreciation increases the difference is __________.
A. added to net income
B. added to investments
C. deducted from net income
D. not considered in the statement of cash flows using the indirect method
Question 38 of 40
2.5 Points
The statement of cash flows provides information about all of the following except __________.
A. organizing activities
B. investing activities
C. operating activities
D. financing activities
Question 39 of 40
2.5 Points
Operating expenses other than depreciation for the year were $400,000. Accrued expenses payable increased by $35,000. Cash payments for operating expenses to be reported on the cash flow statement using the direct method would be __________.
A. $400,000
B. $435,000
C. $365,000
D. $35,000
Question 40 of 40
2.5 Points
When using the indirect method, which of the following would be included in the net cash flows from operating activities section of a cash flow statement?
A. sales of plant, property and equipment
B. making loans and paying out interest
C. payment of interest and expenses
D. issuing bonds and notes
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/06/667e67dd0f99e_156667e67dcef127.jpg)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started