CH 10 learnsmart questions
Debentures bonds are?
unsecured bonds
ABC Corporation issued bonds that pay interest each march1 and September 1. the corporations December 31 adjusting entry may include a?
credit to interest payable
A bonds stated interest rate?
cƒalculates interest payments expressed always as an annual interest rate
callable bonds are?
the issuing company can pay off bonds at any time
the journal entry to record the issuing of 100 bonds at their $1,000 face value will include a debit to _____and a credit to _____
cash, Bonds Payable
Taxable Inc, is required to match $45,900 for its portion of FICA and pay $4700 for federal and state unemployment taxes. The journal entry to record payroll taxes would be?
Debit Payroll tax expense 50,600 credit unemployment tax payable$4700 credit FICA payable for $45,900
John Smith works 40 hours for ABC group at $15/hr. Payroll deductions are $37.20 SS, medicare $8.70, Federal income tax $58, State income tax $10. ABC would record the journal entry
Debit salaries and wages expense for $600 credit cash $486.10 credit State and Fed taxes payable $68 credit FICA payable(ss/medicare) $45.90
the journal entry to record the payment of salaries and wages causes?
Liabilities to increase STE to decrease Assets decrease
which of the following are current liabilities?
Salaries and wages payable Notes Payable Accounts Payable
a $1,000 bond was issued at 107.26 The 107.26 is?
a percent and means that bond was sold for $1,072.60
What are the key events for the issuer of notes payable?
accruing interest incurred but not yet paid record interest paid record principle paid
the premium on a bond is _____ and ______ each period?
amortized ; decreases
the discount on a bond is ____ and ___ the discount each period
amortized;decreases
under US GAAP, a contingent liability should?
be reported on the B/S if the loss will probably occur and can be reasonably estimated not be reported if the loss is remote and unable to be estimated be in the notes of financial statements if the loss may possibly occur and can be reasonably estimated
term bond
bond issue that matures on a single date
the carrying value of bonds payable equals?
bonds payable - discount bonds payable
Convertible Bonds are?
bonds that can be exchanged for shares of stock in the issuing company
serial bonds are?
bonds that mature in installments
if ABC Company issues 100 of its $1,000 bonds at a price of $110.00 each, the journal entry to record the transaction includes ____________
debit Cash of $110,000 credit Bonds Payable of $100,000 credit premium on bonds Payable of $10,000
On November 1, 2015, ABC corp borrowed $100,000 cash on an 1 year, 6% note payable that requires ABC to pay both principal and interest October 31, 2016. The last adjusting entry was made December 31, 2015, ABC year end. The entry to record the payment on October 31,2016 would include?
debit Note payable $100,000 debit interest payable $1,000 debit interest expense of $5,000 credit cash $106,000
in 2005 , ABC Company issued $100,000 of 20yr bonds at face value. 10yrs later the company retired the bonds early by purchasing them for $101,000. the journal entry to record this transaction includes?
debit bonds payable $100,000 debit loss on bond retirement $1000 credit cash $101,000
if ABC Company issues 100 of its $1,000 bonds at a price of 105, the journal entry to record the transaction includes
debit cash for 105,000 credit Bonds Payable $100,000 credit premium on Bonds Payable $5,000
As of December 31, 2015, $110 of interest had been accrued on a 12%, 1 year, 1,000 payable. On January 31, 2016, the entry to record the payment of the note's principle and interest requires a ?
debit interest payable $110 debit notes payable $1,000 debit interest expense $10 credit cash $1,120
on the maturity date, the journal entry to record the payment of 1,000,000 of bonds payable that were issued at a discount 70,000 discount includes?
debits to bonds payable for 1,000,000 credit to cash of 1,000,000
Amortizing a bond discount will_____the discount balance and ______ carrying value of the bonds so that when the bond matures the carrying value will_______the face face value
decrease/increase/equal
whether a bond is issued at par, premium or discount, when the bond matures the amount paid equals the _____ value
face
US corporations pay federal taxes on ?
income & payroll
The times interest earned ratio equals net income plus interest expense and income tax expense, divided by?
interest expense
The discount on Bonds Payable account
is a Contra account to bonds payable
What effect will issuing more bonds have on the times interest earned ratio over time?
it will decrease
Assets are financed with_____and STE
liabilities
XYZ borrowed $50,000 this year. Half of the loan will be repaid next year and the remainder will be paid the following year. which is longer than XYZ's operating cycle. on its balance sheet at the end of this year, XYZ will show?
long term debt of $25,000 current portion of ling term debt of $25,000
when a company records a debit to Bonds payable and credit to cash it is the bonds?
maturity date
bonds carrying value equals Bonds Payable______
minus Discount on Bonds Payable plus Premium on Bonds Payable
bonds that are backed by collateral are?
secured bonds
Todays fashion has a debt that has been reported as a long term liability before this year. part of the debt is due this year. If today's continues to report the current position of the debt as long term liability then?
the current ratio will be overstated