FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 12: Long-Term Liabilities

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 91

True/False

Review LaterAdd Note

Review Later

Present value is the amount a person would invest now to receive a greater amount in the future.

Correct Answer

verified

Show Answer

Question 92

Multiple Choice

Review LaterAdd Note

Review Later

Refer to the following list of liability balances at December 31,2019. What is the total amount of long-term liabilities?

A) $55,000
B) $109,000
C) $94,000
D) $40,000

Correct Answer

verified

Show Answer

Question 93

True/False

Review LaterAdd Note

On the maturity date,the bondholder is paid the face amount of the bond plus the last interest payment.

Using the effective-interest amortization method,the calculation for the amount of premium amortization is the difference between the cash paid for interest and the calculated interest expense based on the effective interest rate.

On January 1,2019,Castle Services issued $169,000 of six-year,12% bonds when the market interest rate was 11%.The bonds were issued for $172,000.Castle uses the effective-interest method to amortize the bond premium.Semiannual interest payments are made on June 30 and December 31 of each year.Which of the following is the correct journal entry to record the first interest payment? (Round your answers to the nearest dollar number. )

The fact that invested cash earns interest over time is called the time value of money.

When bonds are retired at maturity,assuming the last interest payment has already been recorded,the journal entry includes a debit to the Bonds Payable account and a credit to the Cash account.

If $30,000 is invested for one year at an annual interest rate of 13%,it will grow in value to ________.

List the two categories of liabilities reported on the balance sheet and provide an example of each.

Regarding the time value of money,which of the following statements is incorrect?

The Employee Bonus Payable would normally be shown on the balance sheet under long-term liabilities.

On March 1,2018,Barker Services issued a 5% long-term notes payable for $21,000.It is payable over a 3-year term in $7000 annual principal payments on March 1 of each year plus interest,beginning March 1,2019.How will the notes payable be shown on the balance sheet dated December 31,2018?

Callable bonds are bonds that the issuer may call and pay off at a specified price whenever the issuer wants.

Discount on Bonds Payable is additional Interest Expense of the company that issues the bond.

On January 1,2018,Global Sales issued $25,000 in bonds for $29,800.These are eight-year bonds with a stated rate of 15% and pay semiannual interest.Global Sales uses the straight-line method to amortize the bond premium.On June 30,2018,when Global makes the first payment to bondholders,what is the amount that will be reported as Interest Expense? (Round your intermediate answers to the nearest dollar. )

Crystal Glassware Company issues $1,042,000 of its 14%,10-year bonds at 97 on February 28,2019.The bonds pay interest on February 28 and August 31.Assume that Crystal uses the straight-line method for amortization.What net amount will be reported for the bonds on the August 31,2019 balance sheet?

The Golden Company issues $539,000 of 7%,10-year bonds at 104 on March 31,2019.The bonds pay interest on March 31 and September 30.Assume that the company uses the straight-line method for amortization.The journal entry to record the issuance includes a ________.

The balance in the Bonds Payable account is a credit of $67,000.The balance in the Discount on Bonds Payable account is a debit of $2,650.The bond's carrying amount is $64,350.

On January 1,2019,Agree Company issued $85,000 of five-year,8% bonds when the market interest rate was 12%.The issue price of the bonds was $62,401.Agree uses the effective-interest method of amortization for bond discount.Semiannual interest payments are made on June 30 and December 31 of each year.Which of the following is the correct journal entry to record the first interest payment? (Round all amounts to the nearest whole dollar. )

What is the only difference between present value and future value?