QUESTION 27

On November 1, 2014, EZ Products borrowed $48,000 on a 5%, 10-year note with annual installment payments of $4,800 plus interest due on November 1 of each succeeding year. How much interest expense should be accrued at December 31, 2014 for the period of November 1 through year-end?

$1,200

$2,400

$400

$200

3 points

QUESTION 28

Which of the following is TRUE of a premium on bonds payable?

A premium on bonds payable is added to the bonds payable balance and shown with long-term liabilities on the balance sheet.

A premium on bonds payable is added to the bonds payable balance and shown with stockholders' equity on the balance sheet.

A premium on bonds payable is subtracted from the bonds payable balance and shown with long-term liabilities on the balance sheet.

A premium on bonds payable is subtracted from the bonds payable balance and shown with the current liabilities on the balance sheet.