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1.Barley, Inc. sold $30,000 of 8% bonds for $40,200. Each $1,000 bond carried eight rights and each right allowed the holder to acquire one share of $10 par stock for $16 a share. After the issuance of the securities, the bonds were quoted at 104 and the rights were quoted at $4 each. Later, one-half of the rights were exercised. At date of exercise, how much should be credited to Additional Paid-in Capital?

	a.	$1,320
	b.	$720
	c.	$600
	d.	$2,640

Exhibit 14-16

Harrys Inc. issued a four-year, $75,000, non-interest-bearing note to a customer on January 1, 2016. Harry also agrees to sell inventory to the customer at reduced rates over a five-year period. Sales are to be evenly spread over the five-year period. Harrys incremental interest rate is 8%, and the present value of the note is $55,125.

1.Refer to Exhibit 14-16. Harrys total liabilities after recording the note have increased by

	a.	$19,875.
	b.	$75,000.
	c.	$55,125.
	d.	$81,000.

2.Refer to Exhibit 14-16. Harrys interest expense for 2018 is

	a.	$6,000.
	b.	$5,144.
	c.	$4,410.
	d.	$4,763.