1. When the contract rate is above the market rate, a bond sells at a...

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Accounting

1. When the contract rate is above the market rate, a bond sells at a premium.

TRUE OR FALSE.

2. Franklin Company's bank reconciliation as of August 31 is shown below.

Bank balance $14,237 Book balance $13,162
+ Deposit in transit 4,500 Bank service fees 50
Outstanding checks 3,900 Note collected 1,725
Adjusted bank balance $14,837 Adjusted book balance $14,837

The adjusting journal entries that Clayborn must record as a result of the bank reconciliation include:

Multiple Choice

  • Debit Cash $1,725; credit Notes Receivable $1,725.

  • Debit Cash $4,500; credit Sales $4,500.

  • Debit Cash $50; credit Bank Service Fee Expense $50.

  • Debit Notes Receivable $1,725; credit Cash $1,725.

  • Debit Misc. Expense $3,900; credit Cash $3,900.

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