ACCT207 Chapter 10 Practice Questions

A the proportiffif interest expense to payment of

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A) The proportiffif interest expense to payment of principal remains the same. A lnterest expense increases and payment of principal decreases. (cl') Payment of principal increases and interest expense decreases. D) Both payment of principar and interest expense decrease. T"A#rygupes c/'*/t"' t
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.l Bonds usually are issued to obtain cash for the purpose of a. meeting working capital needs investing in short-term marketable securities purchasing insurance acquisitions of long-term assets purchasing office supplies L5' Matsuko company issued Stoo million of fixed interest rate bonds payable at 9g. At year-end, the bonds were selling in the bond market at 10i.. what entry would Matsuko make at year_end to record the change in selling price? ,.2 Debit Bonds payabre g3 miilion; creditlnterest Expense g3 miilion '.r''' Debit Interest Expense g3 miilion; credit Bonds payabre s3 miilion c' Debit rnvestment in Bonds sg miilion; credit tnr"ra,n"n, Revenue s3 ,m.(lion td J No entry needed .+ ;poE:r Y None of the above is correct t0 yys 16' Johnston company issued Sso,ooo bonds payable, 9% annualinterest, maturity in ten years. ., f :m lf^1Xff"::::"::f# e6' Johnston uses straight-line amortization. rhe amount of interest expense L l::^r,xffi::;."::ll# e6 rohnston uses,t,,ish;;;";##[T'+1,::?il1,Ji,1{,,xJ,1,"_.?iii;. .l 1 ly*erE* E)9, U s;,;il 10,t;t]# X .qk " LL$##ff ,, df ; Sovrr{rp*fadr vkryJ i r*+eruttf*,a' :: ii;ii 'v'vwv'r .\ wr""r*r" .o'x:i'E:i I -' dY ' D,se,, *+- ilr (wun i d.
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