On July 1, 2019, Garden Works, Inc. issued $300,500 of ten-year, 7% bonds for $305,500. The bonds were dated July 1, 2019, and semi-annual interest will be paid each December 31 and June 30. Garden Works Inc. uses the straight-line method of amortization.

What is the net amount of the bond liability to be reported on the December 31, 2020 balance sheet?

Multiple Choice

• $300,500.

• $305,500.

• $305,000.

• $304,750.

Katie Company had 42,400 shares of $2 par value common stock outstanding prior to a 40% common stock dividend declaration and distribution. The market value of the common stock on the declaration date was $10. Which of the following statements incorrectly describes the effect of recording the common stock dividend?

Multiple Choice

• Retained earnings decreased $33,920.

• Total stockholders' equity remained the same.

• Additional paid-in capital remained the same.

• Additional Paid-in capital increased $135,680.

Assume Idaho Company recorded the following adjusting journal entry at year-end:

Insurance expense	$2,100
Prepaid insurance			$2,100

If the beginning balance in prepaid insurance was $100, and $3,000 was paid for an insurance premium during the year, what is the ending balance in the prepaid insurance account after the above adjusting entry?

Multiple Choice

• $1,000.

• $700.

• $2,700.

• $1,200.