AC 292 multiple choice (Chapter 11 & 12)

If the bonds payable account has a balance of $900,000 and the discount on bonds payable account has a balance of $72,000, what is the carrying amount of the bonds?

$828,000

The balance in the discount on bonds payable account would usually be reported on the balance sheet in the:

Long term liabilities section

if a corporation reacquires its own stock, the stock is listed on the balance sheet in the

Stockholders' equity

If a corporation plans to issue 1,000,000 of 5% bonds at a time when the market rate for similar bonds is 4% the bonds can be expected to sell at:

a premium; since the contract rate is higher than the market rate

Paid-in capital for a corporation may arise from which of the following sources?

issuing of common stock, issuing of preferred stock, and selling the corporation's treasury stock

What is a disadvantage of the corporate form of organization?

owner is separate from management

A corporation has issues 25,000 shares of $100 par common stock and holds 3,000 of these shares as treasury stock. If the corporation declares a $2 per share cash dividend, what amount will be recorded as cash dividends?

$44,000

The proceeds received from issuing bonds depends

coupon rate of interest, market rate of interest, and principal

Which of the following is the entry to amortize a discount on bonds?

Debit interest expense, credit discount on bonds payable, credit cash

The Stockholders' Equity section of the balance sheet may include

common stock, preferred stock, and stock dividends distributable