Question

23) Zorn Inc. makes a sale for $450. The company is required to collect sales taxes amounting to 10%. When recording this sale, Zorn will A) debit Cash for $450. B) debit Sales Tax Payable for $45. C) debit Sales Tax Expense for $45. D) credit Sales Revenue for $495 E) credit Sales Revenue for $450. 24) On August 1, 2019, Paige's Dance Company borrows $45,000 from Adirondack Bank on a 9-month, 6% note. The adjusting journal entry to accrue interest expense on December 31, 2019 will include a: A) debit to Interest Expense for $1,500. B) credit to Interest Payable for $1,125. C) credit to Interest Expense for $1,125. D) credit to Cash for $1,125. E) credit to Interest Payable for $1,500. 25) Carlson Inc. issues 20-year, 6% bonds with a face value of $200,000. If the bonds are issued at a premium, A) The market interest rate is less than 6%. B) The market interest rate is greater than 6%. C) The market interest rate is 6%. D) No relationship exists between the market interest rate and the bond's 6% interest rate. 26) On the balance sheet, the account Premium on Bonds Payable is: A) classified as a contra-equity account. B) classified as an expense account. C) added to Bonds Payable. D) a contra-liability account. E) classified as a contra-asset account. 27) Maxwell Manufacturing issued $460,000, 9-year, 11% bonds at 106.5. What is the issue price of these bonds? A) $510,600 B) $430,100 C) $489,900 D) $460,000 28) A company issues $500,000 in bonds at an issue price of 98. When recording this transaction, the ce will include a: A) debit to Cash of $490,000. B) credit to Premium on Bonds Payable of $10,000. C) credit to Bonds Payable of $490,000. D) debit to Bonds Payable of $500,000. E) credit to Discount on Bonds Payable of $10,000. WOUDO O 3 106 CDE 106 OOO UUOOO - A

Answer 1

The answer has been presented to the supporting sheet. All the parts has been solved with detailed explanation and calculation. For detailed answer refer to the supporting sheet.

B F Answer Part 23) 2 The correct answer is E) credit sales revenue for $ 450 4 6 Explanation sales are credited excluding the amount of sales tax, so sales will be credited by $ 450 8 Part 24) 9 The correct answer is 10 C) credit to interest payable for $ 1125 11 12 interest expense for 5 months 13 = 45000*6%*5/12 14 =$1125 16 Interst expense will be debited by $ 1125 and interest payable will be credited by $ 1125 18 Part 25) 19 The correct answer is 20 A) The market rate of interest is less than 6% 22 Explanation 23 When market rate of interest is less than coupon rate, then only bonds are issued at premium 25 Part 26) 26 The correct answer is 27 C) added to bond payable 29 explanation 30 premium on bond payable is part of bond payable only, so it is added in it. 31 32 As per cheeg policy we are required to solve the first 4 parts only. For remaining parts you have to post separate question Sheet480 Sheet482 Sheet483 Sheet484 Sheet485/ Sheet486 Sheet487 Sheet481 Sheet4 н. ш