On July 1, Tau, Inc., purchased a machine for $12,000 and issued in payment a one-year note payable for $13,200. On August 31, the company's fiscal year-end, the proper entry would be:

a. Interest Expense 200

Discount on Notes Payable 200

b. Machinery 200

Interest Expense 200

c. Discount on Notes Payable 200

Interest Expense 200

d. Notes Payable 200

Discount on Notes Payable 200

Moore Realty just completed the purchase of an apartment complex on August 1 for $100,000 down and an 11%, 20-year, $400,000 mortgage note. The note requires monthly principal and interest payments of $4,129, with interest computed on the unpaid note balance. The entry to record the September 1 payment would be:

a. Mortgage Note Payable 4,129

Cash 4,129

b. Interest Expense 2,064

Mortgage Note Payable 2,065

Cash 4,129

c. Interest Expense 454

Mortgage Note Payable 3,667

Cash 4,129

d. Interest Expense 3,667

Mortgage Note Payable 462

Cash 4,129

On March 1, 19X4, Grand Junction Railroad issued $50,000 of 8%, 10-year bonds dated March 1 for $43,769. Interest is payable on March 1 and September 1. If Grand Junction uses the straight-line method of amortization, how would these bonds appear on the September 1, 19X4, balance sheet? (Round all calculations to the nearest dollar.)

a. Long-term liabilities:

Bonds payable $50,000

Less: Discount on bonds payable 6,231 $43,769

b. Long-term liabilities:

Bonds payable $43,769

Plus: Discount on bonds payable 6,231 $50,000

c. Long-term liabilities:

Bonds payable $50,000

Less: Discount on bonds payable 5,919 $44,081

d. Long-term liabilities:

Bonds payable $44,081

Plus: Discount on bonds payable 5,919 $50,000