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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 |
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The adjusting journal entries that Clayborn must record as a result of the bank reconciliation include:
Multiple Choice
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Debit Cash $1,725; credit Notes Receivable $1,725.
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Debit Cash $4,500; credit Sales $4,500.
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Debit Cash $50; credit Bank Service Fee Expense $50.
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Debit Notes Receivable $1,725; credit Cash $1,725.
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Debit Misc. Expense $3,900; credit Cash $3,900.
Answer & Explanation
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