Transcribed image text: Section A (12 marks) Multiple Cheier Ouestions Answer ALL questions. Choose the best aner 1 Star Corporation purchased a piece of land paying $2,000,000 cash and financing $9,000,000 of the purchase price with a 10-year, 10% installment note. The note calls for equal monthly payments that will result in the debt being completely repaid by the end of the tenth year. In this situation: A the pregate amount of the monthly payments is 39,000,000 1. each monthly payment is lower than the wount of interest accruing cach month c. the portion of each payment representing interest expense will decrease over the 10- year period, since principal is being paid off, yet the payment amount does not decrease D. the portion of each monthly payment representing repayment of principal remains the same throughout the 10-year period 2 A company has 3.000 ordinary stures conding with she capital of 530,000 and share premium of $150,000. A for share split will: A decrease the number of ordinary shares onding to 1,000 only, 1. Increase the share premium to 590,000 C not affect the number ordinary shares outstanding D. decrease par vale per ordinary share to $3.33 1. Which of the following adjusting entries in are correct? 1 Accumulated Depreciation Depreciation Expense II Prepaid Rent Rent Expose Rent Revene Umeamed Kent Reven TV Income Tax Expo Innee Tax Payable A. IV only B. II and IV CI, IV D. I, III and IV 4ABC Service Company sold a truck for cash with a loss of $10,000 recognised. The truck has a cost of $220,000 md accumulated depreciation of $140,000. The cash received in this sale must have been A $70.000 B560,000 C. $80.000 D. $90.000 Page of An accountant of a company recorded the payment of rent for 5 months from 1 December 2019 10 30 April 2000 for 350,000 on December 2019: De Rent Expense 550,000 C Cash 550,000 Suppose the accountant did not make any adjusting entries regarding rent 1 December 2019, this will result in: Ano error in fent expense as the real expense has been recorded Bovenstatement of net income for the year ended 31 December 2019 C understatement of expense Dunderstatement of asset 5. An accountant of a company recorded the payment of rent for more 1 December 2019 to 30 April 2020 for $50,000 1 December 2019: Dr. Rent Expense $50,000 C Cash $50,000 Suppose the accountant did not make my adjusting entries regarding et 31 December A menor in rent expenses the rent experime has been recorded Roverstatement of net income for the year ended 31 December 2019 C understatement of rent expense Duderstatement of Use the following information to complet question On 1 April 2020, Blueray Corporation $20.000.000 of 10%, 20-year onde payable 101 Interest on the bands is payable semiannually cach 1 April and 1 October The journal entry to record the issue of head ce 1 April 2020 will include: L debit to Chof $20,000,000 EL. credit to Bonds Payable of $20,000,000 III. debit to Discount on Blond Payable of $200,000 IV. credit to Premium on Bond Payable of $200,000 Alony Bland IV c. 1, and m 1. Lland IV 7. The Journal entry to record the fint cash payment to beholders en ober 2001, wit include Acredit to Clash of $2,000,000 Badebutto Premium on Bonds Payable of 35.000 Cadebit to Interest Expense of $1.000,000 D. debit to Bead Payable of $1,000,000 The justing entry required on December 2000, related to this bodele A recognition of Interest Expense of $500,000 Becognition of interest Expense of $497,500 ccredit to interest Payable of $497.500 Da credit to Cash of $500,000 Which of the following is not the main infirmation pervided by financial? A profitability Management whip C Cash flow D. Financial position 10. The principlelmumptice that is violated when a company witches from FIFO Amici to Average Cost Action in valuing invenis A Monetary unitario B Conservatism principle Consistency principle D. Gring concern