The journal entry a company uses to record accrued vacation privileges for its employees at the end of the year is

debit Vacation Pay Expense; credit Vacation Pay Payable

debit Salary Expense; credit Salaries Payable

debit Salary Expense; credit Cash

debit Vacation Pay Payable; credit Vacation Pay Expense

Excom sells radios and each unit carries a two-year replacement warranty. The cost of repair defects under the warranty is estimated at 5% of the sales price. During September, Excom sells 112 radios for $55 each. One radio is actually replaced during September. For what amount in September would Excom debit Product Warranty Expense?

Select the correct answer.

$22

$308

$2,464

$55

A bond indenture is

the amount due at the maturity date of the bonds

the amount for which the corporation can buy back the bonds prior to the maturity date

a contract between the corporation issuing the bonds and the underwriters selling the bonds

a contract between the corporation issuing the bonds and the bondholders

When the corporation issuing the bonds has the right to redeem the bonds prior to the maturity, the bonds are

debenture bonds

callable bonds

unsecured bonds

convertible bonds

When the maturities of a bond issue are spread over several dates, the bonds are called

serial bonds

term bonds

bearer bonds

debenture bonds

If the market rate of interest is 7%, the price of 6% bonds paying interest semiannually with a face value of $500,000 will be

greater than $500,000

equal to $500,000

greater than or less than $500,000, depending on the maturity date of the bonds

less than $500,000

The interest rate specified in the bond indenture is called the

market rate

discount rate

effective rate

contract rate

On January 1 of the current year, the Queen Corporation issued 8% bonds with a face value of $83,000. The bonds are sold for $80,510. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, five years from now. Queen records straight-line amortization of the bond discount. Determine the bond interest expense for the year ended December 31.

Select the correct answer.

$7,138

$6,640

$553

$2,490

If $1,050,000 of 12% bonds are issued at 102 1/2, what is the amount of cash received from the sale?

Select the correct answer.

$1,176,000

$1,050,000

$787,500

$1,076,250