FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 11: Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 51

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following describes the term maturity date?

A) The date on which each interest payment is made
B) The date on which the bond is issued
C) The date on which the principal amount is repaid to the bondholder
D) The date on which the bond is cancelled

Correct Answer

verified

Show Answer

Question 52

Multiple Choice

Review LaterAdd Note

Review Later

On July 1,2013,Avery Services issued a 4% long-term note payable for $10,000.It is payable over a 5-year term in $2,000 principal installments on July 1 of each year. -Which of the following entries needs to be made at July 1,2013 to reclassify the current portion of the note?

A) $\begin{array} { | l | r | r | } \hline \text { Long-term notes payable } & 2,000 & \\\hline \text { Cash } & & 2,000 \\\hline\end{array}$
B) $\begin{array} { | l | r | r | } \hline \text { Current portion of long-term notes payable } & 2,000 & \\\hline \text { Long-term notes payable } & & 2,000 \\\hline\end{array}$
C) $\begin{array} { | l | r | r | } \hline \text { Long-term notes payable } & 2,000 & \\\hline \text { Accounts payable } & & 2,000 \\\hline\end{array}$
D) $\begin{array} { | l | r | r | } \hline \text { Long-term notes payable } & 2,000 & \\\hline \text { Current portion long-term notes payable } & & 2,000 \\\hline\end{array}$

Correct Answer

verified

Show Answer

Question 53

Essay

Review LaterAdd Note

On January 1,2013,Davie Services issued $20,000 of 8% bonds that mature in five years.They were sold at discount,for a total of $19,000.Please provide the journal entry to issue the bonds. $\begin{array} { | l | l | l | } \hline & & \\\hline & & \\\hline\end{array}$

On November 1,2012,EZ Products borrowed $48,000 on a 5%,10-year note with annual installment payments of $4,800 plus interest due on November 1 of each succeeding year. -On December 31,2013,what will the balance be in the account titled Long-term notes payable?

On July 1,2013,Avery Services issued a long-term note payable for $10,000.It is payable over a 5-year term in $2,000 installments on July 1 of each succeeding year.Please provide the initial journal entry for the issuance of the note. $\begin{array} { | l | l | l | } \hline \quad\quad& \quad&\quad \\\hline & & \\\hline\end{array}$

On July 1,2013,Avery Services issued a 4% long-term note payable for $10,000.It is payable over a 5-year term in $2,000 principal installments on July 1 of each year.Each yearly installment will include both principal repayment of $2,000 and interest payment for the preceding one-year period. -What happens on December 31,2013 before statements are prepared?

On July 1,2013,Avery Services issued a long-term note payable for $10,000.It is payable over a 5-year term in $2,000 installments on July 1 of each succeeding year.When the note was issued,the principal amount was initially recorded in Long-term notes payable.In addition,a second entry was made to reclassify the current portion.Please provide the journal entry needed for that reclassification. $\begin{array} { | l | l | l | } \hline \quad\quad& \quad&\quad \\\hline & & \\\hline\end{array}$

On December 31,2013,Peterson Sales has a bonds payable balance of $40,000 and a premium on bonds payable of $900.On the balance sheet,how will this information be shown?

On January 1,2013,Davie Services issued $20,000 of 8% bonds that mature in five years.They were sold at discount,for a total of $19,000.The bonds pay semiannual interest payments on June 30 and December 31 of each year.On June 30,2013,how much is the total amount paid to bondholders?

If a bond is issued at a premium,it will sell for more than face value.

On November 1,2014,EZ Products borrowed $48,000 on a 5%,10-year note with annual installment payments of $4,800 plus interest due on November 1 of each succeeding year.At the end of 2014,EZ Products accrued interest expense.No further entries were made until November 1,2015 when the first installment payment was made.That payment included both principal and interest.Please provide the journal entry for the installment payment made on November 1,2015. $\begin{array} { | l | l | l | } \hline \quad\quad& \quad&\quad \\\hline & & \\\hline & & \\\hline & & \\\hline\end{array}$

The balance in the Bonds payable account is a credit of $50,000.The balance in the Discount on bonds payable is a debit of $1,500.The balance sheet will report the bond balance as $48,500.

The difference between a mortgage payable and a note payable is that notes payable are always long-term.

If a bond's stated interest rate is higher than the market rate,which of the following is TRUE?

Please refer to the following list of liability balances. $\begin{array}{|l|r|}\hline \text { Accounts payable } & \$ 12,000 \\\hline \text { Employee benefits payable } & 360 \\\hline \text { Employee income tax payable } & 190 \\\hline \text { Interest payable } & 1,300 \\\hline \text { Estimated warranty payable } & 2,600 \\\hline \text { Long-term notes payable } & 32,000 \\\hline \text { FICA tax payable } & 590 \\\hline \text { Sales tax payable } & 370 \\\hline \text { Long-term notes payable } & 4,000 \\\hline \text { Bond payable } & 50,000 \\\hline \text { Current portion of long-term notes payable } & 2,000 \\\hline\end{array}$ - What is the total amount of long-term liabilities?

On January 1,2014,Partridge Company issued $50,000 of 6-year bonds with a stated rate of 3%.The market rate at time of issue was 4%,so the bonds were discounted and sold for $47,331.Partridge uses the effective-interest rate of amortization for bond discount.Semiannual interest payments are made on June 30 and December 31 of each year.Please complete the amortization table for the first four interest payments.

On November 1,2013,EZ Products borrowed $48,000 on a 5%,10-year note with annual installment payments of $4,800 plus interest due on November 1 of each succeeding year.Please provide the first journal entry for the initial issuance of the note. $\begin{array} { | l | l | l | } \hline \quad\quad& \quad&\quad \\\hline & & \\\hline\end{array}$

On October 15,2013,Rural Sales has a bond with balances as shown below. If Rural Sales wishes to retire the bonds for $82,000,what will be the effect on the income statement?

On January 1,2013,Davie Services issued $20,000 of 8% bonds that mature in five years.They were sold at par.The bonds pay semiannual interest payments on June 30 and December 31 of each year.On June 30,2013,how much are the total interest payments made to bondholders?

McDonald Sales prepared a bond issue of $20,000 dated January 1,2013.The bonds have a stated rate of 3% and a term of 6 years.The bond issue was delayed,and the bonds were finally sold on March 1,2013 at par.On June 30,2013,the first semiannual interest payment is made.Please provide the journal entry for that payment transaction. $\begin{array} { | l | l | l | } \hline \quad\quad& \quad&\quad \\\hline & & \\\hline & & \\\hline\end{array}$