Bonds Payable are
Debt instruments arising from companies borrowing money from the public
Which of the following is an advantage of issuing bods
- Does not affect ownership control
- Payment of interest to bond holders is tax deductible
- Can influence financial leverage in a positive way
Bonds that mature in instalments are called
serial bonds
The interest rate of the average of all other bonds being sold at the same time as yours is
market rate of interest
The process of allocating a premium or discount over the life of the bond is called
amortization
If a bond issue price borrowed is larger than the face value of the bond, it sold at a
premium
The contract rate between the company and the bond holder is called the
bond indenture
Which of the following is not a current liability
bonds payable
If a $100,000 bond sold at 96, the journal entry to record the sale would include
debit to discount on bonds payable for $4000
Choose the true statement regarding bond issue account
when recorded, it is affect by any amortization of a discount or premium
If a bond issue with face value at $200,000, 10 year bond, with a stated rate of interest at 6% payable semiannually, was issued at 108, it would sell at
a premium
If a bond issue with face value at $200,000, 10 year bond, with a stated rate of interest at 6% payable semiannually, was issued at 108, proceeds collected would equal
$216,000
If a bond issue with face value at $200,000, 10 year bond, with a stated rate of interest at 6% payable semiannually, was issued at 108, cash paid for interest would be equal to
$6000
If a bond issue with face value at $200,000, 10 year bond, with a stated rate of interest at 6% payable semiannually, was issued at 108, 6 months later the journal entry to record this payment of interest would include
debit to interest expense $5200
Net payroll is
The amount you take home as your final payment
The matching principle requires business to report warranty expense
in the same period that the company records the revenue related to the warranty
When a business records payment of accrued interest on a notes payable it
credits notes payable
A contingent liability that is recorded in the notes to the financial statement is
probable but not estimatable
What would the journal entry include when an Accounts Payable balance is transferred to a notes payable account
a debit to accounts payable
Current liabilities are
Obligations due to be paid or settled within one year or the company’s operating cycle, whichever is longer
Gross payroll is
the net amount received after taxes are deducted but before donations are deducted
What type of account is unearned revenue
liabilities
If sales revenue account was credited for $45,000 and sales taxes collected on that revenue was $2,700, the journal entry to record the payment of the taxes would include
a debit to taxes payable for $2700
Which of the following is a current liability
warranty payable
The current portion of long-term debt is shown
in the current liabilities section of the balance sheet