Question

Dl credit to interest Expense 9) Under the effective interest method of amortization the cash samment on A C ntheforchrest period si decrease if bands are issued at a premium crease beds are med at par increase bends data 10) Current abilities fall into two categories which are referred to as A) contra labies and contingent liabilities B) contenties and non contingent l es Clities of a known amount and lateswho t ube be of known amount and contingent es ctivate 11) Bonds with a face value of $100.000 were soldat a ENCES of $100.000 a t the bonds hada A) market rate greater than 10 3) market rate less than 10% C) stated rates than 100 Dl stated rate greater than 10 d 12) Short-termos able A) are generally due within three months with a m a m time period of months B) are shown as a reduction to notes receivable on the balance sheet with an appropriate footnote disclosure C) are shown on the balance sheet with current D) are shown on the balance sheet after bonds payable 13) Potential abilities that depend on future events arising out of past events are called A) long-term abilities B) estimated abilities C) actual abilities D) contingent liabilities 14) The carrying amount of bonds issued at a discount is calculated by A) subtracting Discount on Bonds Payable from Bonds Payable B) subtracting interest Payable from Bonds Payable C) subtracting the sum of Discount on Bonds Payable and interest Payable from Bonds Payable D) subtracting interest Expense from Bonds Payable 15) The carrying amount of bonds is equal to A) the face value of the bonds less the premium on bonds payable B) the face value of the bonds plus the premium on bonds payable C) the face value of the bonds less the discount on bonds payable the face value of the bonds plus the premium on bonds payable or the face value of the bonds less che discount on bonds payable

Answer 1

Dear Student,

As per the HOMEWORKLIB POLICY, only the first four questions should be answered.

Part 9

Answer is option A

A. remain the same for each interest period

The cash payment remains the same whereas interest expenses increases or decreases.

Part 10

Answer is option C

C. liabilities of a known amount and liabilities whose amount must be estimated

Part 11

Answer is option D

D. stated rate greater than 10%

When the stated rate is greater than market interest rate, the bonds are issued at premium.

Part 12

Answer is option C

C. are shown on the balance sheet with current liabilities.

Short term notes payable are generally due within the period of one year and thus they are part of current liabilities.