Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $98,000. The machine's useful life is estimated to be 4 years, or 400,000 units of product, with a $2,000 salvage value. During its second year, the machine produces 80,000 units of product. Determine the machines' second year depreciation under the straight-line method.

Multiple Choice

• $24,500.

• $19,200.

• $19,600.

• $24,000.

• $25,000.

During August, Boxer Company sells $358,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 5% of the selling price. The warranty liability account has a credit balance of $12,600 before adjustment. Customers returned merchandise for warranty repairs during the month that used $9,200 in parts for repairs. The entry to record the estimated warranty expense for the month is:

Multiple Choice

• Debit Estimated Warranty Liability $9,200; credit Warranty Expense $9,200.

• Debit Warranty Expense $17,900; credit Estimated Warranty Liability $17,900.

• Debit Estimated Warranty Liability $17,900; credit Warranty Expense $17,900.

• Debit Warranty Expense $5,300; credit Estimated Warranty Liability $5,300.

• Debit Warranty Expense $14,500; credit Estimated Warranty Liability $14,500.

On January 1, a company issues bonds dated January 1 with a par value of $280,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $291,365. The journal entry to record the issuance of the bond is:

Multiple Choice

• Debit Cash $280,000; debit Premium on Bonds Payable $11,365; credit Bonds Payable $291,365.

• Debit Cash $291,365; credit Bonds Payable $291,365.

• Debit Bonds Payable $280,000; debit Bond Interest Expense $11,365; credit Cash $291,365.

• Debit Cash $291,365; credit Discount on Bonds Payable $11,365; credit Bonds Payable $280,000.

• Debit Cash $291,365; credit Premium on Bonds Payable $11,365; credit Bonds Payable $280,000.

A company issued 5-year, 6% bonds with a par value of $92,000. The company received $89,947 for the bonds. Using the straight-line method, the amount of interest expense for the first semiannual interest period is:

Multiple Choice

• $2,760.00.

• $5,520.00.

• $2,554.70.

• $5,930.60.

• $2,965.30.