Hi again. Please help me once more with my study information. I have provided three assignments. Let me know if you need additional information.

\fFINANCIAL AND MANAGERIAL ACCOUNTING - Fifth Edition E12-18 Requirements 1. Journalize the note issuance on January 1, 2016 (explanations are not required). 2. Prepare an amortization schedule for the first two payments. 3. Journalize the first payment on January 31, 2016 (do not round). 4. Journalize the second payment on February 29, 2016 (do not round). Solution: Requirement 1 Date 2016 Jan. 1 Accounts and Explanation Debit Building Land Mortgage Payable Credit xx xx 650,000 Requirement 2 Beginning Balance Principal Payment 1/1/2016 1/31/2016 $ 650,000.00 2/29/2016 648,896.47 Interest Expens e Interest Total Expense Payment xx xx xx xx Ending Balance $ 650,000.00 $ 648,896.47 647,785.59 xx xx Market interest rate Time $ 650,000.00 x x% x 1/12 $ 648,896.47 x x% x 1/12 = Carrying Amount xx = xx = Requirement 3 Chapter 12: Long-Term Liabilities Page 1 of 7 FINANCIAL AND MANAGERIAL ACCOUNTING - Fifth Edition Date Accounts and Explanation 2016 Jan. 31 Mortgage Payabl Interest Expense Cash Debit Credit xx xx 5,436.86 Requirement 4 Date Accounts and Explanation 2016 Feb. 29 Mortgage Payable Interest Expense Cash Chapter 12: Long-Term Liabilities Debit Credit xx xx 5,436.86 Page 2 of 7 FINANCIAL AND MANAGERIAL ACCOUNTING - Fifth Edition E12-21 Requirements 1. Journalize the issuance of the bonds on June 30. 2. Journalize the semiannual interest payment on December 31. Solution: Requirement 1 Date June 30 Accounts and Explanation Cash Bonds Payable Issued bonds at face value Debit Credit xx xx Accounts and Explanation Interest Expense Cash (xx * % * 6/12) Debit Requirement 2 Date Dec. 31 Credit Paid semiannual interest Chapter 12: Long-Term Liabilities Page 3 of 7 FINANCIAL AND MANAGERIAL ACCOUNTING - Fifth Edition E12A-29 Requirements 1. Determine the present value of seven-year bonds payable with face value of $84,000 and stated interest rate of 12%, paid semiannually. The market rate of interest is 12% at issuance. 2. Same bonds payable as in Requirement 1, but the market interest rate is 16%. 3. Same bonds payable as in Requirement 1, but the market interest rate is 10%. Solution: Requirement 1 Present value = _______ because the stated rate of interest equals the market rate of interest. Requirement 2 Present value of principal: PV = FV x (i= 8% (16%/2), n=12 (6yrs x 2) = = * (a) $33,348 0.397 Present value of stated interest: PV + Amount of each cash flow x Annuity PV factor for i=8% (16%/2), n=12 (6yrs x 2) = ( (a) * ? * ?/12) = xx = $37,981 * ? Present value of bonds payable: PV = PV of principal + PV of stated interest = xx + = $71,329 xx Requirement 3 Chapter 12: Long-Term Liabilities Page 4 of 7 FINANCIAL AND MANAGERIAL ACCOUNTING - Fifth Edition Present value of principal: PV = Future value x PV factor for i=5%(10%/2), n=12 (6yrs x 2) = x (a) ?? = $46,788 Present value of stated interest: PV = Amount of each cash flow x Annuity PV factor for i=5% (10/2), n=12 (6yrs x2) = ( (a) x 0.12 x ?/12) = ?? = $44,670 x ?? Present value of bonds payable: PV = PV of principal + PV of stated interest = ?? + = $91,458 Chapter 12: Long-Term Liabilities ?? Page 5 of 7 FINANCIAL AND MANAGERIAL ACCOUNTING - Fifth Edition n=12 (6yrs x 2) Chapter 12: Long-Term Liabilities Page 6 of 7 FINANCIAL AND MANAGERIAL ACCOUNTING - Fifth Edition Chapter 12: Long-Term Liabilities Page 7 of 7 1) Current liabilities must be paid either in cash or with goods and services within one year or within the entity's operating cycle, if the cycle is longer than a year. a. True b. False 2) Amounts owed for products or services purchased on account are accounts receivable. a. True b. False 3) Benefits are extra compensationitems that are not paid directly to an employee. a. True b. False 4) Gross pay is the total amount of salary, wages, commissions, and bonuses earned by an employee during a pay period, after taxes or any other deductions. a. True b. False 5) Income taxes are withheld from the employee's paycheck. a. True b. False 6) State unemployment compensation tax (SUTA) is not withheld from employees' gross earnings. a. True b. False 7) Federal unemployment compensation tax is paid by the employer and is not deducted from an employee's gross earnings. a. True b. False 8) Usually a company does not know the amount of the year-end bonus at year-end. a. True b. False 9) Warranty Expense is shown on the income statement at the estimated amount. a. True b. False 10) When a company co-signs a note payable for another entity, a current liability must be recorded. a. True b. False 11) The current portion of notes payable is the principal amount that will be paid within two years of the balance sheet date, and the remaining portion is long term. a. True b. False 12) A note payable can either be classified as a long-term liability or a short-term liability, depending on the discretion of the accountant. a. True b. False 13) Bonds are short-term debt issued to multiple lenders called bondholders, usually in increments of $1,000 per bond. a. True b. False 14) On the maturity date, the bondholder is paid the face amount of the bond plus the last interest payment. a. True b. False 15) The future value is the bond's market price a. True b. False 16) When a bond is matured, the carrying value always equals the face value. a. True b. False 17) The main reason companies retire bonds prior to their maturity date is to relieve the pressure of paying interest payments. a. True b. False 18) The Current Portion of Long-Term Notes Payable would normally be shown on the balance sheet under current liabilities. a. True b. False 19) The Employee Bonus Payable would normally be shown on the balance sheet under long-term liabilities. a. True b. False 20) Compound interest means that interest is calculated only on the principal amount a. True b. False Multiple choice questions, worth 2pts each: 60 21) Which of the following is a characteristic of a current liability? A) It creates a present obligation for future payment of cash or services. B) It cannot be settled with services. C) It is an avoidable obligation. D) It occurs because of a future transaction or event. 22) Amounts owed for products or services purchased on account are called ________. A) accounts payable B) unearned revenue C) accrued expense D) warranty payable 23) Sales revenue for a sporting goods store amounted to $526,000 for the current period. All sales are on account and are subject to a sales tax of 10%. Which of the following would be included in the journal entry to record the sales transaction? A) a debit to Sales Revenue for $526,000 B) a credit to Accounts Receivable for $526,000 C) a debit to Sales Tax Payable for $52,600 D) a debit to Accounts Receivable for $578,600 24) Which of the following accounts is credited by the seller when tax is collected on retail sales? A) Accounts Payable B) Payroll Tax C) Sales Tax Payable D) Unearned Revenue 25) ) A $43,000, two-month, 10% note payable was issued on December 1, 2016. What is the amount of interest expense recorded in the year 2017? A) $494 B) $358 C) $717 D) $42,994 26) At the maturity of a note payable, a borrower will pay ________. A) the principal plus interest B) the principal amount only C) the interest amount only D) the principal minus interest 27) Kevin, an employee of Sunbeam, Inc., has gross salary for May of $7,000. The entire amount is under the OASDI limit of $117,000 and thus subject to FICA. He is also subject to federal income tax at a rate of 20%. Which of the following is a part of the journal entry to record the disbursement of his net pay? (Assume a FICAOASDI Tax of 6.2% and FICAMedicare Tax of 1.45%.) A) debit to Cash for $5,064.50 B) credit to Cash for $5,064.50 C) debit to Employee Income Tax Payable of $5,064.50 D) debit to FICA Tax Payable of $5,064.50 28) Which of the following is paid by the employer only? A) OASDI tax B) medicare tax C) employee income tax D) federal unemployment tax 29) It is mandatory for both the employer and employee to pay ________. A) FICA B) SUTA C) employee income tax D) federal unemployment tax 30) Which of the following is included in the entry to record the employer's payroll taxes? A) a debit to State Unemployment Tax Payable B) a credit to Payroll Tax Expense C) a credit to FICAOASDI Tax Payable D) a credit to Salaries Payable 31) Synergy Appliances sells dishwashers with a four-year warranty. In 2017, sales revenue for dishwashers is $97,000. The company estimates warranty expense at 4.5% of revenues. What is the total estimated warranty payable of Synergy Appliances in 2017? A) $4,365.00 B) $1,091.25 C) $1,597.59 D) $3,423.53 32) Which of the following accounting principles requires that warranty expense must be estimated and recognized in the same period when the related sales revenue is recognized? A) the matching principle B) the disclosure principle C) the revenue principle D) the consistency principle 33) White Hat Digital, Inc. starts the year with a credit balance of $3,500 in its Estimated Warranty Payable account. During the year, there were $224,000 in sales and $4,800 in warranty repair payments. White Hat Digital estimates warranty expense at 2% of sales. At the end of the year, what is the balance in the Estimated Warranty Payable account? A) $4,480 debit B) $4,800 credit C) $3,500 debit D) $3,180 credit 34) The times-interest-earned ratio is calculated as ________. A) earnings before interest and tax divided by interest expense B) profit before tax divided by interest expense C) net income divided by interest expense D) income tax expense plus interest expense divided by interest expense 35) The information related to interest expense of Stereo Music, Inc. is given below: Net income Income tax expense Interest expense $264,000 107,000 66,000 Based on the above data, which of the following is the times-interest-earned ratio? A) 4.08 times B) 4 times C) 6.62 times D) 5 times Hint: Times-interest-earned ratio = EBIT / Interest Expense EBIT = Net Income + Income Tax Expense + Interest Expense 36) On March 1, 2016, Baker Services issued a 5% long-term notes payable for $21,000. It is payable over a 3-year term in $7,000 annual principal payments on March 1 of each year plus interest, beginning March 1, 2017. How will the notes payable be shown on the balance sheet dated December 31, 2016? A) $21,000 shown as current liability only B) $7,000 shown as current liability and $21,000 shown as long-term liability C) $7,000 shown as current liability and $14,000 shown as long-term liability D) the entire $21,000 shown as long-term liability 37) On December 1, 2016, Fine Dining Products borrowed $84,000 on a 12%, 5-year note with annual installment payments of $16,800 plus interest due on December 1 of each succeeding year. On December 1, the principal amount was recorded as a long-term note payable. What amount of the note payable will be shown as current portion of Long-Term Note Payable on the balance sheet as of December 31, 2016? (Round your answer to nearest whole number.) A) $16,800 B) $26,880 C) $10,080 D) $33,600 38) The reason investors buy bonds is to ________. A) earn interest B) own controlling interest in the company C) exercise voting rights in a company D) receive dividend payments 39) The amount of cash interest the borrower pays each year is based on the ________. A) market conditions on the day of payment B) market interest rate C) stated interest rate D) effective interest rate 40) Which of the following statements is true of a bond that is issued at a discount? A) The bond will be issued at par. B) The stated interest rate is higher than the prevailing market interest rate. C) At maturity, the bond will repay an amount that is less than the face value. D) The bond will be issued for an amount less than the face value. 41) If bonds with a face value of $209,000 are issued at 93, the amount of cash proceeds is ________. A) $208,907 B) $209,000 C) $194,370 D) $179,740 42) The interest rate that determines the amount of cash interest the borrower pays and the investor receives each year is called the ________. A) amortization rate B) market interest rate C) stated interest rate D) discounting rate 43) On November 1, 2017, Austin Services issued $305,000 of five-year bonds with a stated rate of 12%. The bonds were issued at par, and Austin makes semiannual payments on April 30 and October 31. On December 31, 2017, Austin made an adjusting entry to accrue interest at year-end. No further entries were made until April 30, 2018, when the first payment was made. What amount of interest expense was recorded for the period of January 1 to April 30, 2018? A) $12,200 B) $36,600 C) $18,300 D) $29,280 44) The balance in the Bonds Payable account is a credit of $67,000. The balance in the Discount on Bonds Payable account is a debit of $3,350. What is the bond's carrying amount? A) $3,350 B) $70,350 C) $67,000 D) $63,650 45) Marygrove Glassware Company issues $1,014,000 of 10%, 10-year bonds at 97 on February 28, 2017. The bond pays interest on February 28 and August 31. On August 31, 2017, how much cash did Marygrove pay to the bondholders? A) $51,968 B) $50,700 C) $101,400 D) $49,432 46) The Lakeland Company issues $518,000 of its 10%, 10-year bonds at 106 on March 31, 2017. The bond pays interest on March 31 and September 30. On September 30, 2017, how much cash did the company pay to the bondholders? A) $2,590 B) $51,800 C) $25,900 D) $12,950 47) If a company is financing more assets with debt than with equity, the ________. A) debt to equity ratio will be more than 1 B) debt to equity ratio will be between 0 to 1 C) debt to equity ratio will be equal to 1 D) debt to equity ratio will be negative 48) If $30,000 is invested for one year at an annual interest rate of 13%, it will grow in value to ________. A) $33,900 B) $36,208 C) $3,900 D) $32,308 49) On January 1, 2017, Finch Company issued $74,000 of five-year, 8% bonds when the market interest rate was 12%. The issue price of the bonds was $62,000. Finch uses the effective-interest method of amortization for bond discount. Semiannual interest payments are made on June 30 and December 31 of each year. How much interest expense will be recorded when the first interest payment is made? (Round your answer to the nearest dollar number.) A) $2,480 B) $3,720 C) $2,960 D) $4,440 50) On January 1, 2017, Zing Services issued $168,000 of six-year, 12% bonds when the market interest rate was 11%. The issue price of the bonds was $177,110. Zing uses the effective-interest method to amortize the bond premium. Semiannual interest payments are made on June 30 and December 31 of each year. How much interest expense will be recorded when the first interest payment is made? A) $10,627 B) $9,741 C) $10,080 D) $9,240 Solve it: Worth 5pts each: (please complete all problems to maximize your points and show all work) 50 51) On October 1, 2017, Carlos, Inc. borrowed $225,000 by signing a nine-month, 8% note payable. Interest was accrued on December 31, 2017. Prepare the journal entry July, 1, 2017, the date the note was paid. Notes Payable Interest Expense [($xx 8%) x/12] Interest Payable [(xx 8%) (x/12)] Cash 52) Complete the table to show how each type of employee pay is generally stated. Employee pay Salary Wages Commission Bonus Benefits Generally stated as 53) Karl, an employee of Smith Electric, Inc., has gross salary for March of $4,000. The entire amount is under the OASDI limit of $117,000 and thus subject to FICA. He is also subject to federal income tax at a rate of 18%. Karl has a deduction of $320 for health insurance and $80 for United Way. Provide the journal entry to record salaries expense and payroll withholdings. (Assume a FICAOASDI Tax of 6.2% and FICAMedicare Tax of 1.45%.) Salaries Expense Employee Income Taxes Payable ($xx xx%) FICAOASDI Taxes Payable ($xx xx%) FICAMedicare Taxes Payable ($xx xx%) Employee Health Insurance Payable United Way Payable Salaries Payable ($xx - $xx - $xx - xx - $xx - $xx) xx xx xx xx xx xx xx 54) McBride Industries completed the following transactions during 2016: Made sales of $10,000. McBride estimates that warranty expense is 5% of sales. (Record only the warranty Oct. 1 expense.) Oct. 24 Paid $250 to satisfy warranty claims. Dec. 31 Estimated vacation benefits expense to be $2,350. McBride expected to pay its employees a 4% bonus on net income after deducting the bonus. Net income for Dec. 31 the year is $25,000. Journalize the transactions (explanations are not required). Round to the nearest dollar. Date 2016 Accounts and Explanation Debit Credit Oct. 1 Oct. 24 Dec. 31 Dec. 31 Employee Bonus Expense (x% xx) / 1.04 55) The following transactions of Windsor Enterprises occurred in 2016 and 2017: Purchased a delivery truck at a cost of $14,000, signing a sixJul. 31, 2016 month, 8% note payment for that amount. Recorded the month's sales of $105,000 ($40,000 for cash and the balance on credit). Sales amounts are subject to a 6% state Aug. 31, 2016 sales tax. Ignore cost of goods sold. Sept. 20, 2016 Paid the August sales tax to the state. Accrued warranty expense, which is estimated to be 3% of sales Dec. 31, 2016 of $748,500. Dec. 31, 2016 Accrued interest on the outstanding note payable. Feb. 1, 2017 Paid off the note from July 31, 2016 Journalize the transactions in Windsor's general journal. Explanations are not required. Round to the nearest dollar. Date 2016 Jul. 31 Accounts and Explanations Debit Credit Aug. 31 Feb. 5 Dec. 31 Dec. 31 2017 Jan. 31 56) On January 1, 2017, Sullivan Cabinetry Company purchases $300,000 of property by paying $50,000 in cash and signing a 10-year mortgage note at 13% for the balance. Sullivan will make yearly payments of $46,072. Prepare the amortization schedule for the first five payments. (Round your answers to the nearest dollar.) 01/01/2017 01/01/2018 01/01/2019 01/01/2020 01/01/2021 01/01/2022 Beginning Principal Interest Total Ending Balance Payment Expense Payment Balance $250,000 $250,000 $13,572 $32,500 57) Provide a definition of each of the following types of bonds. Bond Type Definition Term Serial Secured Debenture 58) Complete the following table: Bond's Stated Interest Rate 6% 10% 6% Market Interest Rate 8% 9% 6% Will the issue price of Bonds Payable be at a discount, premium, or face value? 59) On January 1, 2017, Partridge Advertising Company issued $50,000 of six-year, 3% bonds when the market interest rate was 4%. The bonds were issued for $47,356. Partridge uses the effective-interest method of amortization for bond discount. Semiannual interest payments are made on June 30 and December 31 of each year. Prepare the amortization table for the first four interest payments. (Round your answers to the nearest dollar number.) Date 1/1/17 6/30/17 12/31/17 6/30/18 12/31/18 Cash Paid Interest Expense Discount Amortized Carrying Amount 60) On January 1, 2017, Diagem Services issued $140,000 of four-year, 9% bonds when the market rate was 8%. The bonds were issued at $144,713. Diagem uses the effective-interest method to amortize the bond premium. Semiannual interest payments are made on June 30 and December 31 of each year. Prepare the amortization table for the first four interest payments. (Round your answers to the nearest dollar number.) Date 1/1/17 6/30/17 12/31/17 6/30/18 12/31/18 Cash Paid Interest Expense Discount Amortized Carrying Amount Essay Problems: Worth 10 pts each. (Please complete all problems to maximize your points and show all work) I have provided multiple hints for you to help with the process. 50 61) Sandstorm, Inc. signed a 200-day, 5%, $5,000 note on April 1, 2017, and this was the only note payable for the company. Calculate the times-interest-earned ratio of Sandstorm, Inc. if its earnings before interest and taxes for the year ending December 31, 2017, is $4,300. (Use a 360-day year.) EBIT Interest Expense Times-interest-earned 62) The information related to Outloud Music, Inc. is given below: Year ended December 31, 2016 Net Income $81,510 Income Tax Expense 55,910 Interest Expense 6,595 Year ended December 31, 2017 $210,570 103,505 59,505 Calculate the times-interest-earned ratio for each year and also state the percentage change in the ratio. 31, 2016 Net Income $ 81,510 Income Tax Expense 55,910 Interest Expense 6,595 EBIT $ 144,015 Times-interest-earned ratio (EBIT / Interest Expense) xx Percentage Change [(xx - xx) / xx 100 ] xx% 31, 2017 $ 210,570 103,505 59,505 $ 373,580 xx 63) Campbell, Inc. has net income of $500,000 and 200,000 shares of common stock. The company is considering a project that requires $800,000 and is considering two options: Option 1 is to borrow $800,000 at 12%. Option 2 is to issue 100,000 shares of common stock for $800,000. Considering all relevant facts and figures, Campbell's management is of the opinion that the funds raised can be used to increase income before interest and taxes by $300,000 each year. The company estimates income tax expense to be 40%. Analyze the Campbell situation to determine which plan will result in higher earnings per share. (Round your answers to two decimal points.) Net income before new project Expected income on the new project before interest and income tax expenses Less: Interest Expense ($xx xx%) Project income before income tax Less: Income tax expense Project net income Net income with new project Earnings per share with new project Option 1 ($xx / xx) Option 2 ($xx / xx) Option 1 Option 2 $ xx $ xx $ xx xx xx xx $ xx x xx xx $622,400 x xx xx $xx x 64) Cambridge Sales, Inc. has gross salaries and wages for March of $45,000. Provide the journal entry to record salaries and wages expense and payroll withholdings. (Assume a FICAOASDI Tax of 6.2% and FICAMedicare Tax of 1.45%.) Salaries and wages to date are under the OASDI limit. Assume no federal or state income taxes are due. Account Debit Credit 65) Leroy, an employee of Double Time, Inc., has gross salary for March of $4,000. The entire amount is under the OASDI limit of $117,000 and thus subject to FICA. He is also subject to federal income tax at a rate of 18%. Provide the journal entry to record salaries expense and payroll withholdings. (Assume a FICAOASDI Tax of 6.2% and FICAMedicare Tax of 1.45%.) Account Debit Credit E11-14 Recording sales tax Learning Objective 1 Sales Tax Payable $8,500 Consider the following transactions of Moore Software: Mar. 31 Recorded cash sales of $170,000, plus sales tax of 5% collected for the state of New Jer Apr. 6 Sent March sales tax to the state. Journalize the transactions for the company. Ignore cost of goods sold. E11-15 Recording note payable transactions Learning Objective 1 May 1, 2016 Interest Expense $120 Consider the following note payable transactions of Concert Video Productions. 2015 May 1 Purchased equipment costing $12,000 by issuing a one-year, 3% note payable. Dec. 31 Accrued interest on the note payable. 2016 May 1 Paid the note payable plus interest at maturity. Journalize the transactions for the company. E11-16 Recording and reporting current liabilities Learning Objective 1 Dec. 31 Subscription Revenue $150 Worldly Publishing completed the following transactions during 2016: Oct. 1 Sold a six-month subscription (starting on November 1), collecting cash of $450, plus sale Nov. 15 Remitted (paid) the sales tax to the state of Tennessee. Dec. 31 Made the necessary adjustment at year-end to record the amount of subscription revenue during the year. Journalize the transactions (explanations are not required). E11-18 Computing and recording gross and net pay Learning Objective 2 1. Net Pay $362.44 Hubert Sollenberger manages a Dairy House drivein. His straighttime pay is $8 per hour, with timeandahalf for hours in excess of 40 per week. Sollenberger's payroll deductions include withheld income tax of 20%, FICA tax, and a weekly deduction of $8 for a charitable contribution to United Way. Sollenberger worked 56 hours during the week. Requirements 1. Compute Sollenberger's gross pay and net pay for the week. Assume earnings to date are $11,000. 2. Journalize Dairy House wages expense accrual for Sollenberger's work. An explanation is not required. 3. Journalize the subsequent payment of wages to Sollenberger. E12-18 Preparing an amortization schedule and recording mortgages payable entries Learning Objective 1 Keel Company purchased a building and land with a fair market value of $650,000 (building, $550,000, and land, $100,000) on January 1, 2016. Keel signed a 20year, 8% mortgage payable. Keel will make monthly payments of $5,436.86. 3. Interest Expense $4,333.33 Requirements 1. Journalize the mortgage payable issuance on January 1, 2016 (explanations are not required). 2. Prepare an amortization schedule for the first two payments. 3. Journalize the first payment on January 31, 2016 (round to two decimal places). 4. Journalize the second payment on February 29, 2016 (round to two decimal places). E12-21 Journalizing bond issuance and interest payments Learning Objective 3 On June 30, Paulson Company issues 6%, 10year bonds payable with a face value of $60,000. The bonds are issued at face value and pay interest on June 30 and December 31. 1. June 30 Bonds Payable CR $60,000 Requirements 1. Journalize the issuance of the bonds on June 30. 2. Journalize the semiannual interest payment on December 31. E12A-29 Determining the present value of bonds payable Learning Objective 7 Appendix 12A Interest rates determine the present value of future amounts. (Round all numbers to the nearest whole dollar.) 2. Present Value $71,329 Requirements 1. Determine the present value of six-year bonds payable with face value of $84,000 and stated interest rate of 12%, paid semiannually. The market rate of interest is 12% at issuance. 2. Same bonds payable as in Requirement 1, but the market interest rate is 16%. 3. Same bonds payable as in Requirement 1, but the market interest rate is 10%. E11-14 Recording sales tax Learning Objective 1 Sales Tax Payable $8,500 Consider the following transactions of Moore Software: Mar. 31 Recorded cash sales of $170,000, plus sales tax of 5% collected for the state of New Jer Apr. 6 Sent March sales tax to the state. Journalize the transactions for the company. Ignore cost of goods sold. E11-15 Recording note payable transactions Learning Objective 1 May 1, 2016 Interest Expense $120 Consider the following note payable transactions of Concert Video Productions. 2015 May 1 Purchased equipment costing $12,000 by issuing a one-year, 3% note payable. Dec. 31 Accrued interest on the note payable. 2016 May 1 Paid the note payable plus interest at maturity. Journalize the transactions for the company. E11-16 Recording and reporting current liabilities Learning Objective 1 Dec. 31 Subscription Revenue $150 Worldly Publishing completed the following transactions during 2016: Oct. 1 Sold a six-month subscription (starting on November 1), collecting cash of $450, plus sale Nov. 15 Remitted (paid) the sales tax to the state of Tennessee. Dec. 31 Made the necessary adjustment at year-end to record the amount of subscription revenue during the year. Journalize the transactions (explanations are not required). E11-19 Recording employer payroll taxes and employee benefits Learning Objective 2 Payroll Tax Expense $6,135.00 Diego's Mexican Restaurant incurred salaries expense of $70,000 for 2016. The payroll expense includes employer FICA tax, in addition to state unemployment tax and federal unemployment tax. Of the total salaries, $13,000 is subject to unemployment tax. Also, the company provides the following benefits for employees: health insurance (cost to the company, $2,700), life insurance (cost to the company, $380), and retirement benefits (cost to the company, 10% of salaries expense). Journalize Diego's expenses for employee benefits and for payroll taxes. Explanations are not required. E12-18 Preparing an amortization schedule and recording mortgages payable entries Learning Objective 1 Keel Company purchased a building and land with a fair market value of $650,000 (building, $550,000, and land, $100,000) on January 1, 2016. Keel signed a 20year, 8% mortgage payable. Keel will make monthly payments of $5,436.86. 3. Interest Expense $4,333.33 Requirements 1. Journalize the mortgage payable issuance on January 1, 2016 (explanations are not required). 2. Prepare an amortization schedule for the first two payments. 3. Journalize the first payment on January 31, 2016 (round to two decimal places). 4. Journalize the second payment on February 29, 2016 (round to two decimal places). E12-21 Journalizing bond issuance and interest payments Learning Objective 3 On June 30, Paulson Company issues 6%, 10year bonds payable with a face value of $60,000. The bonds are issued at face value and pay interest on June 30 and December 31. 1. June 30 Bonds Payable CR $60,000 Requirements 1. Journalize the issuance of the bonds on June 30. 2. Journalize the semiannual interest payment on December 31. E12A-29 Determining the present value of bonds payable Learning Objective 7 Appendix 12A Interest rates determine the present value of future amounts. (Round all numbers to the nearest whole dollar.) 2. Present Value $71,329 Requirements 1. Determine the present value of six-year bonds payable with face value of $84,000 and stated interest rate of 12%, paid semiannually. The market rate of interest is 12% at issuance. 2. Same bonds payable as in Requirement 1, but the market interest rate is 16%. 3. Same bonds payable as in Requirement 1, but the market interest rate is 10%