Landmark Corp. buys $$300,000$ of Schroeter Company's $8\%,5-$year bonds, at par value on September $1.$ Interest payments are made semiannually. All of the following regarding accounting for these securities are true except:

Select one:

a$.$ The debt securities should be recorded at cost$,$ $$300,000.$

b$.$ The securities will have a maturity value of $$300,000.$

c$.$ The semiannual interest payment amount is $$12,000.$ Incorrect

d$.$ The semiannual interest payment amount is $$24,000.$

e$.$ Interest Revenue should be credited when interest is earned.

A company's sales in Year $1$ were $$250,000$ and in Year $2$ were $$287,500.$ Using Year $1$ as the base year, the percent change for Year $2$ compared to the base year is:

Select one:

a$.87\%.$ Incorrect

b$.100\%.$

c$.115\%.$

d$.15\%.$

e$.13\%.$

Prior to May $1,$ Fortune Company has never had any treasury stock transactions. A company repurchased $100$ shares of its common stock on May $1$ for $$5,000.$ On July $1,$ it reissued $50$ of these shares at $$52$ per share. On August $1,$ it reissued the remaining treasury shares at $$49$ per share. What is the balance in the Paid$-$in Capital, Treasury Stock account on August $2?$

Select one:

a$.$ $$5,050.$ Incorrect

b$.$ $$2,600.$

c$.$ $$100.$

d$.$ $$50.$

e$.$ $$0.$

Seedly Corporation's most recent balance sheet reports total assets of $$35,000,000$ and total liabilities of $$17,500,000.$ Management is considering issuing $$5,000,000$ of par value bonds $($at par$)$ with a maturity date of ten years and a contract rate of $7\%.$ What effect, if any, would issuing the bonds have on the company's debt$-$to$-$equity ratio?

Select one:

a$.$ Issuing the bonds would cause the firm's debt$-$to$-$equity ratio to improve from $1\mathrm{.}0$ to $1\mathrm{.}3.$ Incorrect

b$.$ Issuing the bonds would cause the firm's debt$-$to$-$equity ratio to worsen from $1\mathrm{.}0$ to $1\mathrm{.}3.$

c$.$ Issuing the bonds would cause the firm's debt$-$to$-$equity ratio to remain unchanged.

d$.$ Issuing the bonds would cause the firm's debt$-$to$-$equity ratio to improve from $\mathrm{.}5$ to $\mathrm{.}8.$

e$.$ Issuing the bonds would cause the firm's debt$-$to$-$equity ratio to worsen from $\mathrm{.}5$ to $\mathrm{.}8.$

All of the following statements regarding leases are true except:

Select one:

a$.$ For a finance lease, the lessee records the leased item as its own asset.

b$.$ For a finance lease, the lessee amortizes the right$-$of$-$use asset acquired under the lease.

c$.$ Finance leases create a liability on the balance sheet.

d$.$ Finance leases do not transfer ownership of the asset under the lease, but operating leases often do$.$

e$.$ For a short$-$term lease of a few days or weeks, the lessee records payments as rental expense.

Carpark Services began operations in $20$X$1$ and maintains long$-$term investments in available$-$for$-$sale debt securities$.$ The year$-$end cost and fair values for its portfolio of these debt securities follows. The year$-$end adjusting entry to record the unrealized gain$/$loss at December $31,20$X$1$ is:

Available$-$for$-$Sale Securities Cost Fair Value

December $31,20$X$1$ $ $250,000$ $ $241,000$

December $31,20$X$2$ $ $340,000$ $ $350,000$

Select one:

a$.$ Debit Unrealized Gain $$ Equity $$9,000$; Credit Fair Value Adjustment $$ Available$-$for$-$Sale $($LT$)$ $$9,000.$

b$.$ Debit Unrealized Loss $$ Equity $$9,000$; Credit Fair Value Adjustment $$ Available$-$for$-$Sale $($LT$)$ $$9,000.$

c$.$ Debit Realized Loss $$ Income $$9,000$; Credit Fair Value Adjustment $$ Available$-$for$-$Sale $($ST$)$ $$9,000.$

d$.$ Debit Fair Value Adjustment $$ Available$-$for$-$Sale $($LT$)$ $$9,000$; Credit Unrealized Loss $$ Equity $$9,000.$ Incorrect

e$.$ Debit Fair Value Adjustment $$ Available$-$for$-$Sale $($LT$)$ $$9,000$; Credit Unrealized Gain $$ Equity $$9,000.$