Ordinary repairs are expenditures to maintain the

This preview shows page 1 - 3 out of 5 pages.

7) Ordinary repairs are expenditures to maintain the operating efficiency of a plant assetand are referred to asA. capital expendituresB. expense expenditures
C. improvementsD. revenue expenditures8) Costs incurred to increase the operating efficiency or useful life of a plant asset arereferred to as
9) When an interest-bearing note matures, the balance in the Notes Payable account is
10) The interest charged on a $200,000 note payable, at a rate of 6%, on a 2-month notewould be
11) If a corporation issued $3,000,000 in bonds which pay 10% annual interest, what is theannual net cash cost of this borrowing if the income tax rate is 30%?A. $3,000,000B. $90,000C. $300,000D. $210,000
12) Hilton Company issued a four-year interest-bearing note payable for $300,000 onJanuary 1, 2011. Each January the company is required to pay $75,000 on the note. Howwill this note be reported on the December 31, 2012 balance sheet?
13) A corporation issued $600,000, 10%, 5-year bonds on January 1, 2011 for 648,666,which reflects an effective-interest rate of 8%. Interest is paid semiannually on January 1and July 1. If the corporation uses the effective-interest method of amortization of bondpremium, the amount of bond interest expense to be recognized on July 1, 2011, is

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 5 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Spring
Professor
Rob

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture