ACCT207 Chapter 10 Practice Questions

# A ffi fatse tuofreesy 4 the matching principle

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8' Goodman company borrowed S1oo,o0o cash on September 'J.,2oog, and signed a one-year 1.2%o interest-bearing note payable. The required adjusting entry at the end of the accounting period, Decemlgl3 1,, 2009, would be: ( ,. ) lnterest expense 4,OOO L-/ lnterest payable 4,OOA b. Interest expense 12,000 p X fA x 1- lnterest payable LZ,OOO r r'a tL c. Notes payable 100,000 , i.,r !ir.h r .t? X + lnterest expense 12,000 itv') :'::1' x " \/- " - {-?- Cash 1,12,000 d. lnterest payable 4,OOO lnterest expense 4,OOO 10' A bondholder participates in the company's management and is entitled to a portion of its accumulated earnings. a. true O rarse 11. lf a company issues a bond at a price of 104, then the stated rate of interest must be less than the markeli^qterest rate. a. true ( u) false \-/ 12. 13. The issuance and retirement of bonds have cash frows. ,A. rsignificant impact ""@ **-;*8 a. true \!, fatse Which of the following statements best describes the behavior over time of the co m p o n e nts of egg,a ]gggtenggpta ym e nts ?
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