1. Which of the following businesses most likely would have a large Unearned Revenue account balance at all times?
   1. Pharmacy
   2. Realtor
   3. Magazine publisher
   4. Dry cleaners

2. Which of the statements is FALSE:

1. Current portion of long-term debt is an example of a current liability.
2. The accrual of interest on note payable results in an increase in liabilities and a decrease in cash.
3. A current liability is created when a customer pays cash for services to be provided in the future.
4. Interest expense is reported under other revenues and expenses on the income statement.

3. On October 1, 2021, Maple Corp signed a one-year, 7%, note payable for $84,000. Assuming that Maple maintains its books on a calendar year basis, how much interest expense should be reported on the 2022 income statement? Round your answer to the nearest dollar.

1. 1. $1,470
   2. $2,940
   3. $4,410
   4. $5,880

4. Chestnut Company borrowed $54,000 cash on October 1, 2021, and signed a nine-month, 10%, note payable with interest payable at maturity. Assuming that adjusting entries have been made monthly, the amount of accrued interest payable to be reported on the December 31, 2021 balance sheet is? Round your answer to the nearest dollar.

1. 1. $1,350
   2. $1,800
   3. $2,700
   4. $4,050
   5. $5,400

5. Pine Company borrowed $48,000 cash on August 1, 2021, and signed an eight-month, 9%, note payable with interest payable at maturity. What is the amount of total interest expense on this note? Round your answer to the nearest dollar.

1. 1. $1,800
   2. $2,160
   3. $2,880
   4. $2,700
   5. $4,320

6. Acorn Company borrowed $210,000 cash on October 10, 2021, and signed a 120-day, 4%, note payable with interest payable at maturity. Which of the following would be the required adjusting entry on October 31, 2021? Use 360-day year and round your answer to the nearest dollar.

1. 1. Dr. Notes Payable 210,000

Dr. Interest Expense 490

Cr. Cash 210,490

1. 2. Dr. Interest Expense 490

Cr. Interest Payable 490

1. 3. Dr. Interest Payable 723

Cr. Interest Expense 723

1. 4. Dr. Interest Expense 2,800

Cr. Interest Payable 2,800