1. On January 1, 2023, Entity A purchased a patent for a battery with an increased lifespan and an extremely fast charging capacity. The purchase price for the patent was $40 million. It is estimated that the patent will have a legal life of 18 years and a useful life 15 years. The amount of amortization expense recognized for the year 2023 would be (round to the nearest dollar if necessary).

   		$2,666,667
   		$2,222,222
   		$40,000,000
   		$2,444,445

3 points

QUESTION 21

1. On January 1, 2023, Entity D issued $500,000 of 7%, 5-year bonds at 97. The bonds pay interest annually on December 31 and Entity D amortizes any premium or discount using the straight-line method. What is the annual interest expense on the bonds?

   		$35,000.
   		$32,000.
   		$38,000.
   		$50,000.

3 points

QUESTION 22

1. Which date related to cash dividends (for common stockholders) results in a companys liabilities increasing and its stockholders equity decreasing?

   		the record date.
   		the end of the year.
   		the declaration date.
   		the payment date.

3 points

QUESTION 23

1. Which of the following assets is not properly classified as land improvements?

   		Outdoor fencing
   		Underground sprinkler systems
   		Parking lots
   		Buildings

3 points

QUESTION 24

1. On January 1, 2023, Entity D issued $500,000 of 7%, 5-year bonds at 97. The bonds pay interest annually on December 31 and Entity D amortizes any premium or discount using the straight-line method. These bonds were issued at

   		par of $500,000.
   		a premium of $15,000.
   		a discount of $15,000.
   		a discount of $53,000.

3 points

QUESTION 25

1. Entity H issued 2,000 shares of its $1 par value common stock for $9 per share. Which of the following statements is correct?

   		Cash should be debited for $16,000.
   		Paid-in-capital-in-excess-of-par-value should be debited for $16,000.
   		Common stock should be credited for $2,000.
   		Common stock should be credited for $18,000.