Accounting FINAL

the current portion of a long-term debt would appear on the balance sheet as

a current liability

what are some features regarding bonds payable?

a liability that can be sold at face value, premium, or discount.

a capital lease liability would appear on the balance sheet as

both a current liability and long term liability

convertible bond

can be converted to common stock at the option of the bondholder

interest rate printed on the bond certificate

stated rate, or what the company pays

issued shares represent

the number of shares sold

why are convertible bonds attractive to bondholders?

they can make more money by switching to common stock

which accounts would NOT be classified as a current liability account?

those due after 12 months

a bad issuing at 102.50 means that $1,000 bond sold at what price?

1000 X 1.025= 1025

a current liability includes obligations which must be repaid within what time period ?

12 months

callable bond

can be paid off early by the company

when bonds are issued at a premium, the accounting entry would be what?

cash, bonds payable, premium

what are the lease conditions in a capital lease to the lessee?

contains a margin purchase option and the lease term is at least 75% of the assets useful life

long-term debt generally includes what items?

liabilities due after 12 months

what is the impact on the accounting equation of recording a purchase and a payment on account?

for purchase it would increase an asset and liability or decrease equity and liability

characteristics regarding accounts payable?

free credit, no interest, results from everyday credit purchases

what is the impact on the accounting equation of recording the accrual of wages expense?

increase liability and decrease equity

authorized stock represents

maximum number of shares allowed to be sold

treasury shares represent

number of shares that the company has repurchased

an example of a current liability the must be accrued is

payroll, accrued expenses, inventory purchases

what are the elements of stockholder's equity?

preferred stock, common stock, retained earnings

why is preferred stock preferred?

stockholders get paid first for dividends and in liquidation

outstanding shares represent

the number of shares sold that are still owned by stockholders

bonds sell at a premium when what happens?

the stated rate is more than the market rate