Financial Accounting Final

The Jones Corporation issues 10,000 shares of $50 par value preferred stock for cash at $70 per share. The entry to record the transaction will consist of a debit to Cash for $700,000 and a credit or credits to:

Preferred Stock for $500,000 and Additional Paid-in Capital for $200,000.

When will bonds sell at a discount?

The stated rate of interest is less than the market rate of interest at the time of issue.

Issued shares represent the:

number of shares that the corporation has distributed to owners to date.

Under the effective interest method, the cash paid on each interest payment date will:

remain constant regardless of the issuance price

The interest charged by the bank, at the rate of 9%, on a 3-month, discounted note payable for $100,000 is:

$2,250.

On January 1, 2012, Nunn Inc. issued $800,000, 10- year, 9% bonds for $662,356. The bonds pay interest on June 30 and December 31. The market rate is 12%. Refer to the information provided for Nunn Inc. The interest payment on June 30, 2012, is:

$36,000

Use the information provided for Nunn Inc. to answer the question(s) using the effective interest method. On January 1, 2012, Nunn Inc. issued $800,000, 10- year, 9% bonds for $662,356. The bonds pay interest on June 30 and December31. The market rate is 12%. Refer to the information provided for Flounder Inc. The interest expense on the bonds at June 30, 2012, is:

$39,741.38

Amazon issued bonds in the amount of $500,000 with a stated interest rate of 8%. If the interest is paid semiannually and the bonds are due in 10 years, what would be the total amount of interest paid over the life of the bonds?

$400,000

On January 1, 2012, Nunn Inc. issued $800,000, 10- year, 9% bonds for $662,356. The bonds pay interest on June 30 and December 31. The market rate is 12%. Refer to the information provided for Nunn Inc. What is the carrying value of the bonds after the first interest payment is made on June 30, 2012?

$666,097.78

The excess of sales price of treasury stock over its cost should be credited to:

Additional Paid-In Capital

When a corporation declares a cash dividend, which of the following is true?

Equity decreases.

When a corporation declares a stock dividend, which of the following is true?

Equity remains the same.

Which of the following would most likely be classified as a current liability

Portion of long-term debt due within one year

If bonds are issued at 101.25, this means that:

a $1,000 bond sold for $1,012.50.

Cash paid for preferred stock dividends should be shown on the statement of cash flows under:

financing activities

If bonds were initially issued at a premium, the carrying value of the bonds on the issuer's books will:

decrease as the bonds approach their maturity date.

Many stockholders choose to invest in preferred stock because:

dividends are distributed to preferred stockholders before common stockholders.

One of the main disadvantages of the corporate form is the:

double taxation of dividends.

Current liabilities are:

due and payable within one year.

All of the following are reasons that a corporation may purchase treasury stock except:

if it desires to make an investment in its own stock and is reported as an asset.