I need answers to these and if you can correct the ones I did. If need, Lesson 5

ll~s 18. n5 Martin Corporation sells $200,000, 12%, ten-year bonds at face value on January 1. Interest is paid on January 1 and July 1. The entry to record the issuance of the bonds on January 1 is: __ ..; a. b. . v-(,J v ~ "" () ~ __ d. Cash Bonds Payable 200,000 QOO,OOO tash IInterest Payable Bonds Payable 200,000 24,000 176,000 Cash Interest Expense Bonds Payable 176,000 ~4,OOO ~OO,OOO Cash Interest Expense Bonds Payable 188,000 12,000 ~OO,OOO I' The sale and issuance of $400,000, 8% bonds with a market rate of 8% would involving debiting Cash for: a. --G $432,000. $400,000. c. $368,000. d. $ 32,000. A03K Principles of Accounting II - Page 519 Lasson 5 20. 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. -~)'-- credit to Bonds Payable for $220,000. d. 21. 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>-. \\ d. 22. credit to Cash for $220,000. ($10,000). ($15,000). Management has authorized the purchase of a large quantity of inventory for early December. The purchase will have credit terms of 2/10,n/30, and they will authorize payment by the discount date. How will this decision affect the period's cash flows from operations! indirect method? a. It will increase this period's cash flows from operations. b. It will decrease this period's cash flows from operations. It will not affect this period's cash flows from operations. This does not affect cash flows from operations. , i I' 1 \\ I I ' I i i ! I , A03K Principies of Accounting II - Page 520 Las Ion 5 23. Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in: --((8 24. the operating activities section. b. the financing activities section. c. the investing activities section. d. None of the above 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. I A03K Principles of Accounting II - Page 521 ,\\J. . ..11 LOlson 5 12. Assume the following account balances immediately after an interest payment date: Bonds Payable tpremium on Bonds tpayable $100,000 5,000 If the bonds are retired immediately entry to record this event is: __ __ __ _-'-- a. b. c. d. at a total.cost of $104,000, the journal Cash Loss on Bond Retirement Premium on Bonds Payable Bonds Payable 1"'-\\ 104,000 1,000 15,000 100,000 .. Bonds Payable Premium on Bonds Payable ~K=ash K;ain on Bond Retirement Bonds Payable Loss on Bond Retirement Premium on Bonds Payable tash 100,000 5,000 104,000 1,000 100,000 9,000 15,000 104,000 None of the above A!l3K Principles of Accounting II - Page 516 LISlon 13. 5 A fund set up so that a bond can be retired at maturity is called a: -- sinking fund. a. ~} bond payable fund. ~ -- c. stock fund. -- d. retirement fund. 14. ' The interest rate specified in the bond indenture is called the: -- a. market rate. -- b. discount rate. -+0, -- 15. d. contract rate. effective rate. On April 1, Braintree Corporation issued 10%,ten-year, $300,000bonds at 106. The effective interest rate for these bonds is: a. ' 10%. / b. 9.43%.1\\.., c. 4.7%. d. 5%. A03K (\\ , Principles of Accounting II - Page 517 LOBBon 5 16. On April 1, Braintree Corporation issued 10%,ten-year, $300,000bonds 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. (~ $30,000. r\\ ~) d. 17. $31,000. The entry to record the issuance of a bond between interest payment dates will include 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. A03K Principies of Accounting II - Page 518