Question

QUESTION 34 Fog County Bank agrees to lend the Strong Brick Company $500,000 on January 1. Strong Brick Company signs a $500,000, 6%, 9-month note. The entry made by Strong Brick Company on January 1 to record the proceeds and issuance of the note is A. Cash 500,000 Interest Expense 22,500 Notes Payable 522,500 500,000 B. Cash Notes Payable 500,000 C. Interest Expense Cash Notes Payable 22,500 477,500 500,000 500,000 22,500 D. Cash Interest Expense Notes Payable Interest Payable 500,000 22,500 QUESTION 35 If Grace Company issues 6,000 shares of $5 par value common stock for $210,000, the account A. Paid-in Capital in Excess of Par Value will be credited for $30,000. B. Common Stock will be credited for $210,000. C. Cash will be debited for $180,000. D. Paid-in Capital in Excess of Par Value will be credited for $180,000.

Answer 1

34.

Date	Account Titles and Description	Debit ($)	Credit ($)
January 1	Cash	500,000
	Notes payable		500,000
	(To record the issuance of note)

Option B. is correct answer.

35.

Date	Account Titles and Description	Debit ($)	Credit ($)
	Cash	210,000
	Common stock (6,000*$5)		30,000
	Paid in capital in excess of par value		180,000
	(To record the issuance of common stock)

Option D. is correct answer.