1. The following totals for the month of April were taken from the payroll recor

ID: 2557098 • Letter: 1

Question

1. The following totals for the month of April were taken from the payroll records of Splish Brothers Inc..

The entry to record the payment of net payroll would include a

a. debit to Salaries and Wages Payable for $71640.

b. debit to Salaries and Wages Payable for $66240.

c. credit to Cash for $66240.

d. debit to Salaries and Wages Payable for $65380.

2. If the market rate of interest is greater than the contractual rate of interest, bonds will sell

a. at face value.

b. only after the stated rate of interest is increased.

c. at a discount.

d. at a premium.

3. Whispering Winds Corp. issues 5700, 10-year, 8%, $1000 bonds dated January 1, 2017, at 95. The journal entry to record the issuance will show a

a. credit to Bonds Payable for $5415000.

b. debit to Cash of $5700000.

c. credit to Cash for $5415000.

d. debit to Discount on Bonds Payable for $285000.

4. In the balance sheet, the account Premium on Bonds Payable is

a. deducted from bonds payable.

b. added to bonds payable.

c. classified as a stockholders' equity account.

d. classified as a revenue account.

Can I get some help with the ancwers to these, and a brief explanation? thanks

Salaries $108000 FICA taxes withheld 8260 Income taxes withheld 23800 Medical insurance deductions 4300 Federal unemployment taxes 860 State unemployment taxes 5400

Explanation / Answer

Salaries

$108,000

FICA taxes withheld

8260

Income taxes withheld

23800

Medical insurance deductions

4300

Federal unemployment taxes

860

State unemployment taxes

5400

Net Salary Payable

$65,380

Considering the above calculations the coorect option is d. debit to Salaries and Wages Payable for $65380.

2. The bonds when issued at discount will result in higher market rate of interest as compared to the contractual rate of interest because the value of issue is less than the par value of the bonds. Therefore, the correct option is c. at a discount

Bonds Issued

5700

Coupon Rate

Par Value of Bonds

1000

Issue Price

950

Journal Entry for the issue of the bond

Debit

Credit

Cash

$ 5,415,000

Discount on Bonds Payable

$ 285,000

Bonds Payable

$ 5,700,000

The correct answer with respect to the above journal entry is d. debit to Discount on Bonds Payable for $285000

4. Premium on Bonds Payable is a liability account. The account is always shown in the Balance Sheet as an addition to the amount of the Bonds Payable when the bonds are for long term. The answer is therefore,

b. added to bonds payable.