MC Qu. 145 On July 1, Shady Creek Resort...
On July 1, Shady Creek Resort borrowed $390,000 cash by signinga 10-year, 9% installment note requiring equal payments each June30 of $60,770. What is the journal entry to record the first annualpayment?
Multiple Choice:
Debit Cash $390,000; debit Interest Expense $60,770; creditNotes Payable $450,770.
Debit Interest Expense $60,770; credit Cash $60,770.
Debit Interest Expense $35,100; credit Cash $35,100.
Debit Interest Expense $35,100; debit Interest Payable $25,670;credit Cash $60,770.
Debit Interest Expense $35,100; debit Notes Payable $25,670;credit Cash $60,770.
MC Qu. 148 On January 1, Year 1, Stratton...
On January 1, Year 1, Stratton Company borrowed $210,000 on a10-year, 10% installment note payable. The terms of the noterequire Stratton to pay 10 equal payments of $34,177 each December31 for 10 years. The required general journal entry to record thepayment on the note on December 31, Year 2 is:
Multiple Choice:
Debit Interest Expense $21,000; debit Notes Payable $13,177;credit Cash $34,177.
Debit Notes Payable $21,000; debit Interest Expense $13,177;credit Cash $34,177.
Debit Interest Expense $19,682; debit Notes Payable $14,495;credit Cash $34,177.
Debit Notes Payable $34,177; credit Cash $34,177.
Debit Notes Payable $210,000; debit Interest Expense $13,177;credit Cash $34,177.
MC Qu. 149 On January 1, a company issues...
On January 1, a company issues bonds dated January 1 with a parvalue of $220,000. The bonds mature in 5 years. The contract rateis 9%, and interest is paid semiannually on June 30 and December31. The market rate is 8% and the bonds are sold for $228,930. Thejournal entry to record the issuance of the bond is:
Multiple Choice:
Debit Cash $228,930; credit Discount on Bonds Payable $8,930;credit Bonds Payable $220,000.
Debit Cash $220,000; debit Premium on Bonds Payable $8,930;credit Bonds Payable $228,930.
Debit Bonds Payable $220,000; debit Bond Interest Expense$8,930; credit Cash $228,930.
Debit Cash $228,930; credit Bonds Payable $228,930.
Debit Cash $228,930; credit Premium on Bonds Payable $8,930;credit Bonds Payable $220,000.
