) On December 16, 2016, the ACE Corporation purchases $15,000 of equipment by issuing a 30-day, 12% note payable. The total amount of interest due on the note is:

A) $73.97

B) $147.95

C) $800.00

D) $1,800.00

2) The journal entry to record accrued interest on a short-term note payable must include a:

A) debit to Interest Payable

B) debit to Note Payable

C) debit to Interest Expense

D) credit to Interest Expense

3) Airport Software Ltd. includes an 5% sales tax in the amount credited to the sales account. If the sales account has a balance of $675,250, the amount of the sales tax payable to the government is:

A) $29,347

B) $29,450

C) $32,155

D) $33,763

4) Aviation Holdings Corporation's sales for the day totalled $10,552. Jensen collected an additional 5% in sales tax. The entry to record the day's sales includes a:

A) debit to Sales Tax Expense

B) debit to Sales Tax Payable

C) credit to Sales Tax Expense

D) credit to Sales Tax Payable

5) Potential liabilities that depend on future events arising out of past events are called:

A) long-term liabilities

B) estimated liabilities

C) actual liabilities

D) contingent liabilities

6) A repair to an appliance under warranty occurs within the warranty period. What adjustment is made?

A) Warranty Expense is debited.

B) Repair Expense is debited.

C) Estimated Warranty Payable is debited.

D) Estimated Warranty Payable is credited.

7) The cash proceeds received from issuing a bond are less than the face value of the bond. It is apparent that the bond was issued at:

A) par value

B) a discount

C) a premium

D) face value

8) On a bond's maturity date, its carrying value will equal the:

A) maturity value less all interest payments

B) maturity value plus all interest payments

C) maturity value

D) present value of the bond on its issuance date

9) The carrying amount of bonds issued at a discount is calculated by subtracting Discount on Bonds Payable from Bonds Payable.

a) TRUE

b)FALSE

10) Under the effective-interest method of amortization, the cash payment on each interest payment date will:

A) remain the same for each interest period

B) decrease if bonds are issued at a premium

C) increase if bonds are issued at par

D) increase if bonds are issued at a discount