39 Businesses record goodwill . when they enjoy an outstanding reputation and lo

Question

39 Businesses record goodwill . when they enjoy an outstanding reputation and loyalty with customers B) 1 th assets y acquire another company at an amount higher than the market value of its net C) when they continue the business of an acquired corporation D) if their market value has increased significantly in the recent years 39) Brandy Enterprises discarded a computer that was fully depreciated and had no residual value. As a result of this transaction, Brandy will A) report a loss equal to the historical cost of the computer. B) debit the Computer account and credit the Accumulated Depreciation - Computer account. C) debit the Accumulated Depreciation Computer account; debit Loss on Disposal o Computer account, and credit the Computer account D) zero out the Computer and Accumulated Depreciation Computer accounts 40) Leonard Technologies invests $68,000 to acquire S68,000 face value, 10%, five-year corporate bonds on December 31, 2014. The bonds will mature on December 31, 2019. The bonds pay interest semiannually on December 31 and June 30 every year until maturity. Assume Leonard Technologies uses a calendar year. Based on the information provided which of the following will be included in the journal entry for the transaction on December 31, 2018? A) a credit to Interest Revenue for $6800 B) a debit to Interest Revenue for $6800 C) a credit to Interest Revenue for $3400 D) a debit to Interest Revenue for $3400

Explanation / Answer

Answer 38

B. If they acquire another company at an amount higher than the market value of itsnet assets.

Explanation : When buyer acquire existing bussiness at a value higher than the market or fair value of the net assets than the excess amount is called as goodwill.

Answer 39

D . Zero out the computer & Accumulated depreciation - computer accounts

Explanation : When an asset is fully depreciated & have no salvage value than on disgarding such asset , the carrying amount is zero ie nullify the asset account & respective Accumulated depreciation account.

Answer 40

C. a credit to Interest Revenue for $3,400

Explanation : Jounal Entry for December 31 , 2018 would be :

Cash $3,400 Interest Revenue ( $68,000 * 10 % / 2) $3,400

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