ACCT 2030 Ch. 9-10 Learnsmart

A bond with a face value of $1,000 has a current price quote of 102.880. What is the bond's current price in dollars? $102,880.00 $10,028.00 $1,020.09 $1,028.80

$1,028.80

A bond's stated interest rate is _____. (Check all that apply) increased when the market price of a bond fails affected by the price investors pay for the bond used to calculate interest payments always expressed as an annual interest rate

used to calculate interest payments always expressed as an annual interest rate

The Accumulated Depreciation balance will be ____. large relative to the asset's cost in the latter years of the asset's life equal to the Depreciation Expense on the income statement each period since they are both closed at the end of the accounting period large relative to the asset's cost in the early years of the asset's life if straight-line is used small relative to the asset's cost in the latter years of the asset's life

large relative to the asset's cost in the latter years of the asset's life

Companies that have issued bonds will report the bonds as a(n) _____.

liability at the bonds' carrying value which is equal to the face value plus related premiums or minus related discounts

Partial-year modifications are not necessary for ____ depreciation.

units-of-production

On January 1, 2015, Ace Electronics bought a new cash register for $2,500 and estimates a useful life of 4 years and $0 residual value. For tax purposes, the TOTAL depreciation expense that Ace can record over the cash register's useful life is ____.

$2,500

On January 1, 2018, Ace Electronics bought a new cash register for $2,500. Ace plans to use the cash register for 4 years and then sell it for $200. If Ace uses straight-line depreciation, depreciation expense for the year ended December 31, 2018 equals ____. $1,875 $1,925 $2,300 $575 $625

$575

On January 1, 2018, X-it Company bought a new delivery truck for $30,000. X-it plans to use the truck for 4 years, after which it will be sold for $6,000. Depreciation Expense for 2019, the 2nd year of use, using double-declining-balance equals _____.

$7,500 ($30,000 - 15,000) x 2/4

Match the interest rates with the related bond prices. 1. 6% stated interest rate and 4% market interest rate 2. 6% stated interest rate and 6% market interest rate 3. 6% stated interest rate and 8% market interest rate

1. premium- investors will pay more than face value 2. investors will pay face value 3. discount- investors will pay less than face value bonds sell at... premium if the stated rate is greater than market rate; discount if the stated rate is less than market rate

A bond with an issue price of $10,100 and a face value of $10,000 was issued at _____. 101.000 10.10 1,010.000

101.000

The following 12%, $1,000 notes have varying periods to maturity but all were issued on December 1. Which of the following are the correct calculations of interest for these notes on December 31 of this same year? (Select all that apply.)

A 3-month note's interest equals $1,000 x 12% x 1/12 A 4-month note's interest equals $1,000 x 12% x 1/12 A 2-year note's interest equal $1,000 x 12% x 1/12

Which of the following are not required payroll deductions from an employees' gross earnings? (Check all that apply) State unemployment tax (SUTA) FICA tax Federal unemployment tax (FUTA) Federal income tax Medicare Charitable contributions

Charitable contributions, Federal unemployment tax (FUTA), and State unemployment tax (SUTA)

Vango, Inc. sold its van for $10,000 cash. The van's original cost was $40,000, and its accumulated depreciation was $32,000. When recording the sale, Vango should record a _____.

Gain on Disposal of $2,000

Depreciation and impairment are different in that only _____.

Impairment represents the decline in the current value of the related asset.

True or false: When a $1,000 bond retires at maturity, the entry is recorded with a debit to Bonds Payable and credit to Cash of $1,000 regardless of whether the bond was issued at a premium or discount.

TRUE

Morris Lest, Inc. sold its truck and received less cash than the truck's book value. The net effect of this sale on the accounting equation is a(n) ______. increase to assets increase to SE decrease to SE decrease to liabilities decrease to assets

decrease to SE decrease to assets

On September 1, ABC Company borrowed $50,000 on a 6%, 9-month note payable to XYZ National Bank. The entry ABC would record at maturity when the note is repaid, assuming adjusting entries were made correctly at December 31 but have not been made since then, would include a(n) ________. (Check all that apply.)

credit to Cash of $52,250 debit to Interest Payable of $1,000 debit to Notes Payable of $50,000 debit to Interest Expense of $1,250

The entry to record an equipment's impairment includes ____. (Select all that apply.)

credit to Equipment debit to Impairment Loss

The Mane Event, Inc. sold its barber chair for $500. The chair's original cost was $1,200, and its accumulated depreciation was $800. When recording the sale, Mane Event should ____. debit Accumulated Depreciation for $800 credit Gain on Disposal for $100 credit Furniture for $400 credit Furniture for $1,200

debit Accumulated Depreciation for $800 credit Gain on Disposal for $100 credit Furniture for $1,200

On the maturity date, the journal entry to record the payment of $1,000,000 of bonds payable that were issued at a $70,000 discount includes a _______. (Select all that apply.) debit to Bonds Payable of $1,000,000 credit to Cash of $1,000,000 debit to Discount on Bonds Payable of $70,000 credit to Cash of $1,070,000

debit to Bonds Payable of $1,000,000 credit to Cash of $1,000,000

The entry to record the early retirement of bonds when the cash paid is more than the bonds' carrying value will include a ____. debit to Cash for $98,000 credit to a Gain on Early Retirement credit to a Loss on Early Retirement debit to a Gain on Early Retirement

debit to Cash for $98,000

The entry to record the issuance of 100, $1,000 bonds for 98.00 includes a ______. (Select all that apply.)

debit to Cash for $98,000 debit to Discount on Bonds Payable for $2,000 credit to Bonds Payable for $100,000

Depreciation ______. decreases an asset's book value which is not necessarily equal to its current market value captures sudden drops in asset values that arise due to impairments measures an asset's impairment results in assets being reported at their current market values

decreases an asset's book value which is not necessarily equal to its current market value

The asset's book value (or cost minus accumulated depreciation) must equal its residual (salvage) value at the end of its useful life using which depreciation method? (Select all that apply.)

double-declining-balance units-of-production straight-line

When recording the adjusting entry to accrue the interest owed on a bond that was issued at face value, the debit to Interest Expense will be ____. greater than the credit to Interest Payable equal to the credit to Cash less than the credit to Cash equal to the credit to Interest Payable greater than the credit to Cash

equal to the credit to Interest Payable

The stated rate is the rate used to determine the ____. present value face value interest payment interest expense

interest payment

Current portion of Long-Term Debt reports the amount of ____ and is reported on the _____. long-term debt that is reclassified because it is due within the year; income statement long-term debt that is reclassified because it is due within the year; balance sheet debt borrowed in the current year; balance sheet debt borrowed in the current year; income statement

long-term debt that is reclassified because it is due within the year; balance sheet

The write-down of equipment due to impairment will cause _____. net income to decrease total assets to decrease intangible assets to decrease long-term liabilities to increase

net income to decrease total assets to decrease

A bond that was issued at face value will have a carrying value that ____ with each interest payment. decrease remains the same increases

remains the same

The stated rate ____. remains the same throughout the life of the bonds equals the present value of the future interest payments fluctuates depending on the perceived risk of the bonds

remains the same throughout the life of the bonds