On January 1, 2019, Grant Transport purchased a $120,000 truck for hauling cattle across the border. Grant plans on driving the truck for eight years or 400,000 kilometres. Expected residual value for the truck is $30,000. The book value of the truck at the end of 2020, after recording amortization for the year using the straight-line method, is O A. $97,500 O B. $108,750 OC. $105,000 OD. $91,875 Using the straight-line method of amortization, for a discounted bond the interest expense is calculated based on the O A. cash payment plus (the total amortization / number of interest periods) OB. cash payment less the total amortization / number of interest periods) O C. cash payment plus (the total amortization / number of years) OD. cash payment less (the total amortization / number of years) Which of the following describes a serial bond? O A. a bond that repays principal in installments OB. a bond that matures at one specified time O c. a bond that gives the bondholder a claim for specific assets if the issuer fails to pay OD. a bond that is not backed by specific assets Under the effective-interest method of amortizing bond premium, the interest expense recorded for each semiannual interest payment O A. is at the same percentage of the bonds' carrying value for every interest payment OB. will equal the amount of cash paid for each semiannual interest payment O c. will increase each interest payment date OD is equal to the carrying value of the bond times the contract rate of interest for one half a year Kootenay Mining Company purchased a mine in 2019 for $3,400,000. It was estimated that the mine contained 200,000 tons of ore and that the mine would be worthless after all of the ore was extracted. The company extracted 25,000 tons of ore in 2019 and 30,000 tons of ore in 2020. What is the amortization expense for 2020? O A. $510,000 O B. $680,000 O C. $425,000 OD. $340,000 A company purchased a used machine for $80,000. The machine required installation costs of $8,000 and insurance while in transit of $500. At which of the following amounts would the equipment be recorded? O A. $88,500 OB. $80,500 OC. $80,000 OD. $88,000 Jackson Construction Company Ltd. paid $42,000 for equipment with a fair market value of $46,000. Jackson Construction Company Ltd. will record equipment at O A. $46,000 OB. either $42,000 or $46,000 O C. $42,000 OD. $44,000 (average) Cycle Company Ltd. made a lump-sum purchase of land, buildings, and equipment for $630,000. The appraised market values for the items are respectively, $210,000, $322,000, and $168,000. Cycle Company Ltd. should debit the equipment account for O A. $168,000 OB. $151,200 OC. $289,800 OD. $189,000
