Exam 10: Liabilities

A) a credit to Discount on Bonds Payable of $57,500.
B) a debit to Cash of $442,500.
C) a debit to Bonds Payable of $500,000.
D) a credit to Premium on Bonds Payable of $90,000.

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A) but not receivable for more than one year or the current operating cycle,whichever is longer.
B) but not payable for more than one year or the current operating cycle,whichever is longer.
C) and receivable within the current operating cycle or one year,whichever is longer.
D) and payable within the current operating cycle or one year,whichever is longer.

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A) $1,000
B) $1,080
C) $800
D) $864

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A) Debit Cash for $10,800 and credit Bonds Payable,Net for $10,800.
B) Debit Cash for $10,800,credit Bonds Payable,net for $10,000,and credit Premium on Bond Payable for $800.
C) Debit Cash for $10,000,debit Interest Expense for $800,credit Bonds Payable,net for $10,000,and credit Premium on Bonds Payable for $800.
D) Debit Cash for $10,000,debit Interest Expense for $800,credit Bonds Payable for $10,000 and credit Premium on Bonds Payable for $800.

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A) Federal income tax,federal unemployment tax,and Medicare.
B) Social security tax,federal unemployment tax,and state unemployment tax.
C) FICA taxes,federal unemployment tax,and state unemployment tax.
D) Federal income tax,state income tax,and Medicare.

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A) 0.5
B) 7.5
C) 0.3
D) 2.0

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A) Interest expense falls for bonds sold at either a discount or a premium.
B) Interest expense rises for bonds sold at a discount and falls for bonds sold at a premium.
C) Interest expense rises for bonds sold at either a discount or a premium.
D) Interest expense falls for bonds sold at a discount and rises for bonds sold at a premium.

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A) a current liability.
B) income tax expense.
C) an asset.
D) an operating expense.

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A) debit Interest Expense for $543,debit Premium on Bonds Payable for $157,and credit Interest Payable for $700.
B) debit Interest Expense for $700,credit Premium on Bonds Payable for $157,and credit Interest Payable for $543.
C) debit Interest Expense for $700,debit Premium on Bonds Payable for $157,and credit Interest Payable for $543.
D) debit Interest Expense for $543 and credit Interest Payable for $543.

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A) Under straight-line amortization,when a bond is sold at a premium,the annual premium amortization is the total premium divided by the number of years until bond maturity.
B) When a bond is sold at a discount,interest expense recorded using the effective-interest method is less than the interest paid on the bond.
C) The effective-interest method of amortization is considered to be conceptually superior to straight-line amortization.
D) When a bond discount is amortized using the effective-interest method,the promised interest payment is less than the interest expense,so the bond liability will increase as a result of the contra-liability account decreasing.

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A) salaries payable.
B) current portion of long-term debt.
C) income tax payable.
D) interest payable.

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A) Option A
B) Option B
C) Option C
D) Option D

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A) $700.
B) $543.
C) $667.
D) $759.

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A) Buying goods and services on credit.
B) Obtaining a short-term loan.
C) Issuing long-term debt.
D) Remitting sales tax to the government.

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