CHAPTER 9 Circle the letter of the best response. 1. 2. When calculating deferred income taxes: A. Income tax payable is based on tax reporting rules. B. Income tax payable is based on GAAP. C. Income tax expense is based on tax reporting rules. D. Income tax expense can never equal income tax payable. The Fuller Company issued a $100,000, 5-year, 6% bond at par. It is a semiannual bond with interest paid on June 30th and December 31". The entry to record the sale of the bond would include a: A. $100,000 credit to Cash. B. $6,000 debit to Interest Expense. C. $100,000 debit to Accounts Payable. D. $100,000 credit to Bonds Payable. 3. Refer to Question 3. The entry to record the semiannual interest payment is: A. Interest Expense 6,000 Cash 6,000 B. Interest Expense 3,000 Cash 3,000 C. Interest Payable 6,000 Cash 6,000 D. Interest Expense 3,000 Interest Payable 3,000 5. On January 1. Southeast Airlines issued $300,000 of 9%, 5-year, callable bonds when the market interest was 8%. On a date when the carrying value of the bonds is $300.500, the bonds are called and retired at 99. Southeast will report a: A. $3,500 Gain on Retirement of Bonds Payable. B. $300,000 credit to Bonds Payable. C. $300,500 credit to Cash. D. $3,500 Loss on Retirement of Bonds Payable. For 2019, Lail Company reports beginning total assets of $100 million and ending total assets of $180 million. Beginning common stockholders' equity was $60 million and ending stockholders' equity was $90 million. Net income for 2019 was $45 million. The leverage ratio for 2019 equals: A. 0.53 B. 3.11 C. 1.94 D. 1.67