CH14.2 Do In Class Circle the letter of the best response and show the work for
ID: 2405767 • Letter: C
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CH14.2 Do In Class Circle the letter of the best response and show the work for each one l. A five-year, si 00.00. 4% note payable was isso d on December 31,20X8. The note requires principal payments of $20,000 plus interest due each year beginning December 31.20x9. The entry to record the annual payment at the end of year two on December 31, 20xO, includes a A. debit to Interest Expense for 5800. B. debit to Interest Expense for $3,200. C. credit to Cash for $24,000. D. credit to Notes Payable for $20,000. Make sure to include the journal entry 2. Crystal, Inc.'s trial balance shows $800,000 face value of bonds with a discount balance of $12,000. The bonds mature in 20 years. How will the bonds be presented on the balance sheet? A. Bonds payable $800,000 will be listed as a long-term liability. A S12,000 discount on bonds payable will be listed as a current liability B. Bonds payable $800,000 will be listed as a long-term liability. A $12,000 discount on bonds payable will be listed as a contra-current liability C. Bonds payable $800,000 will be listed as a long-term liability D. Bonds payable $788,000 (net of $12,000 discount) will be listed as a long-term liability. 3. Dawson Company issued $400,000 of 8% serial bonds at face value on December 31, 2018 Half of the bonds mature January 1, 2021, while the other half of the bonds mature January 1, 2029. Orn December 31, 2020, the balance sheet will show which of the following? A. Bonds payable of $400,000 will be listed as a long-term liability. B. Bonds payable of $400,000 will be listed as a current liability C. Bonds payable of $200,000 will be listed as a long-term liability. Bonds payable of $200,000 will be listed as a current liability D. Bonds payable of $408,000 will be listed as a long-term liability. Jordan Inc. has total assets of $500,000. Current liabilities are S10,000, and long-term liabilities are S90,000. What is the debt to equity ratio? 4. A. 0.180 B. 0.200 C. 0.225 D. 0.250 5. A $400,000 bond priced at 102 can be bought or issued for A. $102,000. B. $392,000. C. $402,000. D. $408,000.Explanation / Answer
1.B.debit interest expense for $3,200.
the folllowing will be the journal entrY:
2.B.Bond's payable $800,000 will be listed as a long term liability .A $12,000 discount on bonds payable will be listed as a contra liability.
(discount on bonds payable will be shown as a deduction from the bonds payable account).
3.C.Bonds payable of $200,000 will be listed as a long term liability. BOnds payable $200,000 will be listed as a current liability.
(since half of the bonds are due in january 1, 2021, these will be classified as short term liablilty, the bonds due on 2029 will be longterm liability).
4.D.0.250.
equity = total assets - total liabilities
=>$500,000 - $10,000 - $90,000
=>$400,000.
debt to equity ratio = (10,000 + 90,000) / 400,000
=>0.250.
5.D.$408,000
bond can be issued for $400,000*102%=>$408,000.
date accounts debit credit dec 31 20x0 notes payable a/c $20,000 Interest expense a/c $3,200 ...............To Cash a/c $23,200 interest expense = ($100,000-20,000 repaid in 20x9)*10%=>$3,200)Related Questions
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