On June 1, 20X5, Ban Co. borrowed on a $1,440 000 note payable from the Federal Bank.
The note bears interest at 11% and is payable in three equal annual principal payments of $480,000. On this date, the bank's prime rate was 12%. The first and second annual payments for interest and principal was made on June 1, 20X6 and June 1, 20X7.
At December 31, 20X7, what amount should Ban report as accrued interest payable?
A.	$30,800
B.	$52,800
C.	$61,600
D.	$33,600
At April 30, Year 1, a $1,500,000 note payable was included in Cab Corp.'s liability account balances. The note is dated May 1, Year 1, bears interest at 14%, and is payable in three equal annual payments of $500,000. The first interest and principal payment was made on May 1, Year 2. In its November 30, Year 2 balance sheet, what amount should Cab report as accrued interest payable for this note?
A.	$70,000
B.	$81,667
C.	$40,833
D.	$46,667
On September 30, Win Co. borrowed $1,500,000 on a 8% note payable. Win paid the first of four quarterly payments of $393,900 when due on December 30. In its December 31 balance sheet, what amount should Win report as note payable?
D.	$1,136,100
Lab's Corp. frequently borrows from the bank in order to maintain sufficient operating cash. The following loans were at a 13% interest rate, with interest payable at maturity. Lab repaid each loan on its scheduled maturity date.
Date of Loan	Amount
12/1/X4	$7,000
9/1/X5	17,000
7/1/2005	9,000
Lab records interest expense when the loans are repaid. As a result, the interest expense of $1,700 was recorded in 2005. If no correction is made, by what amount would 2005 interest expense be understated?
A.	$656
B.	$0
C.	$456
D.	$556
On May 1, 20X4, Fin Co. borrowed $18,000 and signed a two-year note bearing interest at 9% per annum compounded annually. Interest is payable in full at maturity on April 30, 20X6.
What amount should Fin report as a liability for accrued interest at September 30, 20X5?
A.	$160
B.	$3,386
C.	$2,797
D.	$2,356
On January 1, a company issued a $75,000 face value, 9% five-year bond for $67,920 that will yield 11%. Interest is payable on June 30 and December 31. What is the bond-carrying amount on December 31 of the current year?
A.	$75,000
B.	$68,281
C.	$67,920
D.	$68,661
On September 1, Year 1, Cobb Co. issued a note payable to the National Bank in the amount of $1,200,000, bearing interest at 11%, and payable in three equal annual principal payments of $400,000.
On this date, the bank's prime rate was 12%. The first payment for interest and principal was made on September 1, Year 2 and September 1, Year 3
At December 31, Year 3, Cobb should record accrued interest payable of
B.	$14,667
On September 1, 20X5, Mann Corp. issued $900,000 of its 10-year, 9% term bonds dated August 1, 20X5. The bonds were sold to yield 11%, with total proceeds of $810,000 plus accrued interest. Interest is paid every August 1 and February 1. What amount should Mann report for interest payable in its December 31, 20X5 balance sheet?
A.	$40,500
B.	$27,000
C.	$33,750
D.	$41,250
On January 1, 20X4, Hill Corp. issued 300 of its $1,000 face value bonds at 103 plus accrued interest. The bonds were dated November 1, 20X3, and bear interest at an annual rate of 8% payable semiannually on November 1 and May 1. What amount did Hill receive from the bond issuance?
A.	$313,000
B.	$310,000
C.	$309,000
D.	$303,000
On January 2, year 4, Gill Co. issued $2,000,000 of 8-year, 8% bonds at par. The bonds, dated January 1, year 4, pay interest semiannually on January 1 and July 1. Bond issue costs were $280,000.
What amount of bond issue costs are unamortized at September 30, year 7 assuming straight-line method?
A.	$170,800
B.	$143,500
C.	$148,750
D.	$131,250
Will Co. reported the following liabilities at December 31, 20X1:
Accounts payable-trade	$820,000
Short-term borrowings	450,000
Mortgage payable, current portion $115,000	720,000
Other bank loan, matures June 30, 20X2	1,200,000
The $1,200,000 bank loan was refinanced with a 20-year loan on January 15, 20X2, with the first principal payment due January 15, 20X3. Will's audited financial statements were issued February 28, 20X2. What amount should Will report as current liabilities at December 31, 2001?
A.	$1,385,000
On January 1, year 1, Fan Corp. issued 1,200 of its 10%, $1,000 bonds for $1,260,000. These bonds were to mature on January 1, year 11 but were callable at 102 any time after December 31, year 4. Interest was payable semiannually on July 1 and January 1.
On October 1, year 6, Fan called all of the bonds and retired them.
The bond premium was amortized on a straight-line basis. Before income taxes, Fan's gain or loss in year 6 on this early extinguishment of debt was
A. $1,500 gain.
B. $25,500 gain.
C. $34,500 loss.
D. $15,500 gain	1224600
	$1,224,000
	$600
On June 30, 2005, Tow Co. had outstanding 8%, $3,000,000 face amount, 15-year bonds that matured on June 30, 2015. Interest is payable on June 30 and December 31.
The unamortized balances in the bond discount and deferred bond issue costs accounts on June 30, 2005 were $90,000 and $40,000, respectively. On June 30, 2005, Tow acquired all these bonds at 94 and retired them.
What net carrying amount should be used in computing gain or loss on this early extinguishment of debt?
B.	$2,870,000
On June 2, year 1, Tor, Inc. issued $600,000 of 10%, 15-year bonds at par. Interest is payable semiannually on June 1 and December 1. Bond issue costs were $8,000. On June 2, year 7, Tor retired half of the bonds at 99.
What is the net amount that Tor should use in computing the gain or loss on the retirement of debt?
A.	$296,000
B.	$297,600
C.	$300,000
D.	$298,000
Nu Corp. agreed to give Rand Co. a machine in full settlement of a note payable to Rand. The machine's original cost was $165,000. The note's face amount was $150,000. On the date of the agreement, the note's carrying amount was $145,000, and its present value was $137,000.
1 The machine's carrying amount was $140,000, and its fair value was $133,000.
2 What amount of net gain (or losses) should Nu recognize?
A. ($5,000)
B. $4,000
C. ($13,000)
D. $1,500