Question 1: Logan Logistics Ltd. has a fleet of delivery vehicles that are traded in when they reach 200,000 km. Truck #3846 is traded in for a new identical model #9929. The accounting records show the following data for this transaction: #3346 cost = $80,000 #3346 accumulated depreciation = $68,400 Cash paid by Logan to seal the deal = $62,570 Sticker price (Manufacturers Suggested Retail Price) for # 9929 = $92,000

Required 1: What amount should #9929 be capitalized at? $

Required 2: What is the net book value of the asset at the moment of the disposition? If negative use the minus sign "-" $

Required 3: What gain (loss) will Condor show in accounting for the disposal of the asset? If negative use the minus sign "-" $

Question 2: When the effective interest method of amortization is used, what happens to the amount of discount or premium amortized as a bond moves toward maturity?

Multiple Choice

The amount of discount or premium amortized each period decreases.

None of these

The amount of discount or premium amortized each period increases.

Question 3: Company A sells a machine to Company B on September 1 for $27,000. The down payment to be paid by Company B is $3,000. Company B must pay monthly minimum payments of $265. 12% interest rate per annum on the unpaid balance is deducted from each payment and the balance is applied to reduce the principal outstanding. Company B makes the following payments to Company A:

October 1	$	500
November 1	$	500
December 1	$	1,000
January 2	$	500

Prepare a partial amortization schedule in order to answer the following question. In preparing an amortization schedule, what is the balance at the end of December?

Multiple Choice

$23,740

$22,720

$23,480

Question 4; Expanding Corporation financed a $500,000 expansion by mortgaging their head office building for seven years. They negotiated a rate of 5% per annum. They will make equal annual payments at the end of the year. Note: if needed, complete the amortization table for the mortgage using the effective interest method What is the amount of the principal payment in Year 2

Multiple Choice

$71,429

$64,480

$25,000

Question 5: Frozen Company issues $33,800 of ten year bonds on January 1, 2020 at 108. It uses the straight line method of amortization and prepares annual financial statements on December 31st. (Keep two decimal places in all your intermediate calculations).

Required 1: What is the carrying value of the bonds on 2020 Financial Statements? $

Required 2: What is the carrying value of the bonds on 2021 Financial Statements? $

Required 3: What is the carrying value of the bonds on 2024 Financial Statements? $