Question 1

On January 1, a company borrowed $50,000 cash by signing a 7% installment note that is to be repaid in 5 annual end-of-year payments of $12,195. The first payment is due on December 31. Prepare the journal entries to record the first and second installment payments.

Accepted Answer

The answer of On January 1, a company borrowed $50,000...

Question 2

____________________ bonds reduce a bondholder's risk by requiring the issuer to create a fund of assets set aside as specified amounts and dates to repay the bonds.

Accepted Answer

The answer of ____________________ bonds reduce a bondholder's risk by...

Question 3

___________________ bonds have an option exercisable by the issuer to retire them at a stated dollar amount prior to maturity.

Accepted Answer

The answer of ___________________ bonds have an option exercisable by...

Question 4

Mandarin Company has 9%, 20-year bonds outstanding with a par value of $500,000 and a carrying value of $475,000. The company calls the bonds at $482,000. Calculate the gain or loss on the retirement of these bonds.

Accepted Answer

The answer of Mandarin Company has 9%, 20-year bonds outstanding...

Question 5

On January 1, Year 1 a company borrowed $70,000 cash by signing a 9% installment note that is to be repaid with 4 annual year-end payments of $21,607, the first of which is due on December 31, Year 1.
(a) Prepare the company's journal entry to record the note's issuance.
(b) Prepare the journal entries to record the first and second installment payments.

Accepted Answer

The answer of On January 1, Year 1 a company...

Question 6

______________ bonds are bonds that are scheduled for maturity on one specified date.

Accepted Answer

The answer of ______________ bonds are bonds that are scheduled...

Question 7

When applying equal total payments to a note, with each payment the amount applied to the note principal ____________ while the interest expense for the note _____________.
Answers must appear in this order

Accepted Answer

The answer of When applying equal total payments to a...

Question 8

_________________________ leases are short-term or cancelable leases in which the lessor retains the risks and rewards of ownership.

Accepted Answer

The answer of _________________________ leases are short-term or cancelable leases...

Question 9

Bonds payable to whoever holds them are called _________________ bonds.

Accepted Answer

The answer of Bonds payable to whoever holds them are...

Question 10

A company previously issued $2,000,000, 10% bonds, receiving a $120,000 premium. On the current year's interest date, after the bond interest was paid and after 40% of the total premium had been amortized, the company purchased the entire bond issue on the open market at 98 and retired it. Prepare the journal entry to record the retirement of these bonds.

Accepted Answer

The answer of A company previously issued $2,000,000, 10% bonds,...

Question 11

_______________ bonds have specific assets of the issuing company pledged as collateral.

Accepted Answer

The answer of _______________ bonds have specific assets of the...

Question 12

An _______________ is a series of equal payments at equal time intervals.

Accepted Answer

The answer of An _______________ is a series of equal...

Question 13

_______________ bonds are bonds that mature at more than one date, often in a series, and thus are usually repaid over a number of periods.

Accepted Answer

The answer of _______________ bonds are bonds that mature at...

Question 14

A _______________________ is a contractual agreement between an employer and its employees for the employer to provide benefits (payments) to employees after they retire.

Accepted Answer

The answer of A _______________________ is a contractual agreement between...

Question 15

The ____________ concept is the idea that cash paid (or received) in the future has less value now than the same amount of cash paid (or received) today.

Accepted Answer

The answer of The ____________ concept is the idea that...

Question 16

_____________________ bonds can be exchanged for a fixed number of shares of the issuing corporation's common stock.

Accepted Answer

The answer of _____________________ bonds can be exchanged for a...

Question 17

A company has 10%, 20-year bonds outstanding with a par value of $500,000. The company calls the bonds at 96 when the unamortized discount is $24,500. Calculate the gain or loss on the retirement of these bonds.

Accepted Answer

The answer of A company has 10%, 20-year bonds outstanding...

Question 18

An ________________________________ is an obligation requiring a series of payments to the lender.

Accepted Answer

The answer of An ________________________________ is an obligation requiring a...

Question 19

The legal document identifying the rights and obligations of both the bondholders and the issuer is called the ____________________________________.

Accepted Answer

The answer of The legal document identifying the rights and...

Question 20

On January 1, Year 1 Cleaver Company borrowed $85,000 cash by signing a 7% installment note that is to be repaid with 4 annual year-end payments of $25,094, the first of which is due on December 31, Year 1.
(a) Prepare the company's journal entry to record the note's issuance.
(b) Prepare the journal entries to record the first installment payment.

Accepted Answer

The answer of On January 1, Year 1 Cleaver Company...

Quiz 10: Accounting for Long-Term Liabilities

On January 1, a company borrowed $50,000 cash by signing a 7% installment note that is to be repaid in 5 annual end-of-year payments of $12,195. The first payment is due on December 31. Prepare the journal entries to record the first and second installment payments.

____________________ bonds reduce a bondholder's risk by requiring the issuer to create a fund of assets set aside as specified amounts and dates to repay the bonds.

___________________ bonds have an option exercisable by the issuer to retire them at a stated dollar amount prior to maturity.

Mandarin Company has 9%, 20-year bonds outstanding with a par value of $500,000 and a carrying value of $475,000. The company calls the bonds at $482,000. Calculate the gain or loss on the retirement of these bonds.

______________ bonds are bonds that are scheduled for maturity on one specified date.

When applying equal total payments to a note, with each payment the amount applied to the note principal while the interest expense for the note _. Answers must appear in this order

_________________________ leases are short-term or cancelable leases in which the lessor retains the risks and rewards of ownership.

Bonds payable to whoever holds them are called _________________ bonds.

_______________ bonds have specific assets of the issuing company pledged as collateral.

An _______________ is a series of equal payments at equal time intervals.

_______________ bonds are bonds that mature at more than one date, often in a series, and thus are usually repaid over a number of periods.

A _______________________ is a contractual agreement between an employer and its employees for the employer to provide benefits (payments) to employees after they retire.

The ____________ concept is the idea that cash paid (or received) in the future has less value now than the same amount of cash paid (or received) today.

_____________________ bonds can be exchanged for a fixed number of shares of the issuing corporation's common stock.

A company has 10%, 20-year bonds outstanding with a par value of $500,000. The company calls the bonds at 96 when the unamortized discount is $24,500. Calculate the gain or loss on the retirement of these bonds.

An ________________________________ is an obligation requiring a series of payments to the lender.

The legal document identifying the rights and obligations of both the bondholders and the issuer is called the ____________________________________.

Quiz 10: Accounting for Long-Term Liabilities

On January 1, a company borrowed $50,000 cash by signing a 7% installment note that is to be repaid in 5 annual end-of-year payments of $12,195. The first payment is due on December 31. Prepare the journal entries to record the first and second installment payments.

____________________ bonds reduce a bondholder's risk by requiring the issuer to create a fund of assets set aside as specified amounts and dates to repay the bonds.

___________________ bonds have an option exercisable by the issuer to retire them at a stated dollar amount prior to maturity.

Mandarin Company has 9%, 20-year bonds outstanding with a par value of $500,000 and a carrying value of $475,000. The company calls the bonds at $482,000. Calculate the gain or loss on the retirement of these bonds.

______________ bonds are bonds that are scheduled for maturity on one specified date.

When applying equal total payments to a note, with each payment the amount applied to the note principal ____________ while the interest expense for the note _____________. Answers must appear in this order

_________________________ leases are short-term or cancelable leases in which the lessor retains the risks and rewards of ownership.

Bonds payable to whoever holds them are called _________________ bonds.

_______________ bonds have specific assets of the issuing company pledged as collateral.

An _______________ is a series of equal payments at equal time intervals.

_______________ bonds are bonds that mature at more than one date, often in a series, and thus are usually repaid over a number of periods.

A _______________________ is a contractual agreement between an employer and its employees for the employer to provide benefits (payments) to employees after they retire.

The ____________ concept is the idea that cash paid (or received) in the future has less value now than the same amount of cash paid (or received) today.

_____________________ bonds can be exchanged for a fixed number of shares of the issuing corporation's common stock.

A company has 10%, 20-year bonds outstanding with a par value of $500,000. The company calls the bonds at 96 when the unamortized discount is $24,500. Calculate the gain or loss on the retirement of these bonds.

An ________________________________ is an obligation requiring a series of payments to the lender.

The legal document identifying the rights and obligations of both the bondholders and the issuer is called the ____________________________________.

When applying equal total payments to a note, with each payment the amount applied to the note principal while the interest expense for the note _. Answers must appear in this order