During 2021, Deluxe Leather Goods issued 800,000 coupons which entitles the customer to a $5.00 cash refund when the coupon is submitted at the time of any future purchase. Deluxe estimates that 70% of the coupons will be redeemed. 350,000 coupons had been processed during 2021. Deluxe recognizes coupon expense in the period coupons are issued. At December 31, 2021, Deluxe should report a liability for unredeemed coupons of:

$560,000.

$1,050,000.

$1,225,000.

$1,750,000.

On April 1, 2021, Austere Corporation issued $300,000 of 10% bonds at 105. Each $1,000 bond was sold with 25 detachable stock warrants, each permitting the investor to purchase one share of common stock for $17. On that date, the market value of the common stock was $15 per share and the market value of each warrant was $2. Austere should record what amount of the proceeds from the bond issue as an increase in liabilities?

$285,000.

$300,000.

$315,000.

$0.

Which of the following would most likely require initial recording as deferred revenue?

Potential claims on extended warranties.

Customer premium offers.

Potential liability on a product where none have yet been sold.

Sales tax payable.

On October 1, 2021, Sonoma Company leased equipment from Napa Inc. in lease payable in five equal annual payments of $440,000, beginning Oct 1, 2022. Similar transactions have carried an 10% interest rate. The right-of-use asset would be recorded at: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

$0.

$1,667,948

$1,834,743

$2,200,000

On January 1, 2021, Ozark Minerals issued $10 million of 9%, 10-year convertible bonds at 101. The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 40 shares of Ozark's no par common stock. Bonds that are similar in all respects, except that they are nonconvertible, currently are selling at 99. Upon issuance, Ozark should:Top of Form

Debit discount on bonds payable $100,000.

Credit premium on bonds payable $100,000.

Credit equity $100,000.

Credit bonds payable $10,100,000.