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AC Exam 2 Version A

AC Exam 2 Version A - AC 210 Fall 2007 Exam#2 Version A...

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AC 210 Fall 2007 Exam #2 Version A Score _____/100 NAME_______________________ Student Number_________________________ 1. Mondo Cano Enterprises, borrowed $100,000 from a bank at 12% annual interest and arranged to repay it over two years with monthly payments. How much is the payment? a. $4,707 b. $4,167 c. $4,541 d. $4,889 2. The Ski Supplies Depot borrowed $106,000 via 3-year, 8% note payable. The note is to be repaid in three equal year-end installments. How much interest expense will the firm incur for the first year of the note? 3. The difference between the future and present value of an amount is 4. On January 1, 2003, Alpha Beta Company issued 5-year bonds having a face value of $100,000. The bonds pay 7% interest annually and were sold for $94,706 to yield 8.34% interest (market/effective rate). Alpha Beta’s 2003 income statement should report what amount for interest expense on these bonds? 5. When the market (effective) rate for a bond is higher than the stated (or coupon) rate, the bond a. will sell at par b. will sell at a discount c. will sell at a premium d. cannot be sold until the market and stated rates are equal
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6. Which of the following situations is NOT consistent with the circumstances of a capital lease? 7. Under what conditions must a contingency be reported as a liability? 8. If a company has 500,000 shares of common stock authorized, 300,000 shares issued, and 50,000 shares held as treasury stock, how many shares are outstanding?
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