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ACC 556 WEEK 7 HOMEWORK CHAPTER 10 • Question 1 A current liability must be paid out of current earnings. • Question 2 Most notes are not interest bearing. • Question 3 Unearned revenues are received before goods are delivered or services are rendered. • Question 4 The carrying value of bonds is calculated by adding the balance of the Discount on Bonds Payable account to the balance in the Bonds Payable account. • Question 5 Material gains or losses on bond redemption are reported as an extraordinary item on the income statement. • Question 6 Liabilities are classified on the balance sheet as current or • Question 7 With an interest-bearing note, the amount of assets received upon issuance of the note is generally • Question 8 The interest charged on a $70,000 note payable, at the rate of 6%, on a 90-day note would be • Question 9 On January 1, 2014, Keisler Company, a calendar-year company, issued $700,000 of notes payable, of which $175,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2014, is • Question 10 Norlan Company does not ring up sales taxes separately on the cash register. Total receipts for October amounted to $29,400. If the sales tax rate is 5%, what amount must be remitted to the state for October’s sales taxes? • Question 11 Stockholders of a company may be reluctant to finance expansion through issuing more equity because • Question 12 Which of the following is not an advantage of issuing bonds instead of common stock? • Question 13 When authorizing bonds to be issued, the board of directors does not specify the • Question 14 If the market rate of interest is 10%, a $10,000, 12%, 10-year bond that pays interest annually would sell at an amount • Question 15 If bonds are issued at a discount, it means that the • Question 16 In the balance sheet, the account Discount on Bonds Payable is • Question 17 If bonds have been issued at a discount, then over the life of the bonds the • Question 18 Ervay Company has $875,000 of bonds outstanding. The unamortized premium is $12,600. If the company redeemed the bonds at 101, what would be the gain or loss on the redemption? • Question 19 The relationship between current assets and current liabilities is • Question 20 Match the items below by entering the appropriate code letter in the space provided. o Question Selected Match Bonds that mature in installments. J. Serial bonds Unsecured bonds issued against the general credit of the borrower. H. Current ratio A legal document that sets forth the terms of a bond issue. B. Times interest earned The rate investors demand for loaning funds to a corporation. I. Discount on bonds payable Occurs when the contractual rate of interest is less than the market rate of interest. A. Maturity date A measure of a company’s short-term liquidity. C. Callable bonds Produces a periodic interest expense that is the same amount each interest period. G. Debenture bonds A measure of a company’s solvency. D. Market interest rate Bonds subject to retirement at a stated dollar amount prior to maturity. F. Bond indenture The time that the final payment on a bond is due from the bond issuer. E. Straight-line method of amortization o Accounts Assignment Help, Accounts Homework help, Accounts Study Help, Accounts Course Help


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