Accounting

Question: Gester Corporation retires its $100,000 face value bonds at 105 on January 1, following the payment of semiannual interest. The carrying value of the bonds at the redemption date is $103,745. The entry to record the redemption will include a:
A
credit of $3,745 to Loss on Bond Redemption.

B
debit of $3,745 to Premium on Bonds Payable.

C
credit of $1,255 to Gain on Bond Redemption.

D
debit of $5,000 to Premium on Bonds Payable.

Note: Not available
1. Report
Question: Sanger Company has a bond sinking fund in the amount of $400,000. Where should this amount be reported on the balance sheet?
A
Investment section.

B
Current assets section.

C
Current liabilities section.

D
Long-term liabilities section.

Note: Not available
1. Report
Question: Andrews Inc. issues a $497,000, 10% 3-years mortgage note on January 1. The note will be paid in three annual installments of $200,000, each payable at the end of the year. What is the amount of interest expense that should be recognized by Andrews Inc. in the second year?
A
$16,567

B
$49,740

C
$34,670

D
$347,600

Note: Not available
1. Report
Question: Lease A does not contain a bargain purchase option, but the lease term is equal to 90 percent of the estimated economic life of the leased property. Lease B does not transfer ownership of the property to the lessee by the end of the lease term, but the lease term is equal to 75 percent of the estimated economic life of the leased property. How should the lessee classify these leases. Lease A Lease B
A
Operation lease Capital lease

B
Operation lease Operation lease

C
Capital lease Operation lease

D
Capital lease Capital lease

Note: Not available
1. Report
Question: On January 1, Besalius Inc. issued $1,000,000, 9% bonds for $939,000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. Besalius uses the effective-interest method of amortizing bond discount. At the end of the first year, Besalius should report unamortized bond discount of:
A
$54,000

B
$57,100

C
$51,610

D
$51,000

Note: Not available
1. Report
Question: On January 1, Dias Corporation issued $1,000,000, 14%, 5-year bonds with interest payable on July 1 and January 1. The bonds sold for $1,098,540. The market rate of interest for these bonds was 12%. On the first interest date, using the effective-interest method, the debit entry to Bond Interest Expense is for:
A
$60,000

B
$76,000

C
$65,912

D
$131,825

Note: Not available
1. Report
Question: Debit investments are initially recorded at:
A
cost.

B
cost plus accrued interest.

C
fair value.

D
None

Note: Not available
1. Report
Question: Hanes Company sells debt investments costing $26,000 for $28,000, plus accured interest that has been recorded. In journalizing the sale, credits are to:
A
Debt Investment and Loss on Sales of Debet Investments.

B
Debt Investment, Gain on Sales of Debt Investment and Bond Inerest Receivable.

C
Stock Investment and Bond Interest Receivable.

D
No correct answer given.

Note: Not available
1. Report
Question: Pryor Company receives net proceeds of $42,000 on the sale of stock investments that cost of $39,000. This transaction will result in reporting in the income statement a:
A
loss of $2,500 under "other expenses and losses".

B
loss of $2,500 under "operation expenses".

C
gain of $2,500 under "other revenues and gains".

D
gain of $2,500 under "operating revenues".

Note: Not available
1. Report
Question: The equity method of accounting for long-term investments in stock should be used when the investor has significant influence over an investee and owns:
A
between 20% and 50% of the investee's common stock.

B
20% or more of the investee's common stock.

C
more than 50% of the investee's common stock.

D
less than 20% of the investee's common stock.

Note: Not available
1. Report

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Question: Gester Corporation retires its $100,000 face value bonds at 105 on January 1, following the payment of semiannual interest. The carrying value of the bonds at the redemption date is $103,745. The entry to record the redemption will include a:

Question: Sanger Company has a bond sinking fund in the amount of $400,000. Where should this amount be reported on the balance sheet?

Question: Andrews Inc. issues a $497,000, 10% 3-years mortgage note on January 1. The note will be paid in three annual installments of $200,000, each payable at the end of the year. What is the amount of interest expense that should be recognized by Andrews Inc. in the second year?

Question: Debit investments are initially recorded at:

Question: Hanes Company sells debt investments costing $26,000 for $28,000, plus accured interest that has been recorded. In journalizing the sale, credits are to:

Question: Pryor Company receives net proceeds of $42,000 on the sale of stock investments that cost of $39,000. This transaction will result in reporting in the income statement a:

Question: The equity method of accounting for long-term investments in stock should be used when the investor has significant influence over an investee and owns: