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Question;1. Downing company issues \$4,000,000 6%, 5 year bonds dated January 1,2014 on January 1, 2014. The bonds pay interest semiannually on June 30 and December 31. The bonds are issued to yield 5%. What are the proceeds from the bond issue?;2. On January 1, 2014 Huber Co. sold 12% bonds with a face value of \$1,000,000. The bonds mature in 5 years and interest is paid semiannually on June 30 and Dec 31. The bonds were sold for \$ 1,077,250 to yield 10%. Using the effective interest method of amortization, interest expense for 2014 is;a) \$100,000;b) \$107,419;C) \$107,700;d) \$ 120,000;3. At the beginning of 2014, Winston corporation issued 10% bonds with a face value of \$ 2,000,000. These bonds mature in 5 years, and the interest is paid semiannually on June 30 and Dec 31. The bonds were sold for \$ 1,852,800 to yield 12%. Winston uses a calendar year reporting period. Using the effective interest method amortization, what amount of interest expense should be reported for 2014? Round answer;a) \$ 221, 667;b) \$ 222, 333;c) \$ 223, 006;d) \$ 229, 440;4. Manning company issued 10,000 shares of its \$ 5 par value common stock having a fair value of \$ 25 per share and 15,000 shares of its \$15 par value preferred stock having a fair value of \$ 20 per share for a lump sum of \$ 530,000. How much of the proceeds would be allocated to the common stock?;a) \$ 250,000b) \$ 240,909c) \$ 289,091d) \$ 281,563;5. On September 1, 2014. Valdez Company reacquire 20,000 shares of its \$10 par value common stock for \$ 15 per share. Valdez uses the cost method to account for treasury stock. The journal entry to record the reacquisition of the stock should debit;a) Treasury stock for \$ 200,000b) Common stock for \$ 200,000c) Common stock for \$ 200,000 and paid in capital excess of par for \$ 75,000.d) Treasury stock for \$ 300,000;6. Long co issued 100,000 shares of \$ 10 par common stock for \$ 1,200,000. A year later Long acquire 12,000 shares of its won common stock at \$15 per share. Three months later Long Sold 6,000 of these shares at \$19 per share. If the cost method is used to record treasury stock transactions, to record the sale of the 6,000 treasury shares, Long should credit;a) Treasury stock for \$ 114,000b) Treasury stock for \$ 60,000 and paid in capital from treasury stock for \$ 54,000c) Treasury stock for \$ 90,000 and paid in capital from treasury stock for \$ 24,000d) Treasury stock for \$ 90,000 and paid in capital excess of par for \$ 24,ooo;7. Luther inc has 4.000 shares of 6% \$ 50 par value, cummulative preferred stock and 100,000 shares of \$1 par value common stock outstanding at Dec 31, 2015 and Dec 31, 2014. The board of directors declared and paid a \$ 10,000 dividend in 2014. In 2015, \$ 48,000 of dividends are declared and paid. What are the dividends received by the preferred stockholders in 2015?;a) \$ 34,000b) \$ 24,000c) \$ 14,000d) \$ 12,000;8. A company issues \$ 10,000,000, 7.8%, 20 year bonds to yield 8% on January 1, 2014. Interest is paid on June 30 and Dec 31, The proceeds from the bonds are \$ 9,802,072. What is the interes expense for 2015, using the straight-line amortization?;a) \$ 1,026,805b) \$ 780,000c) \$ 784,596d) \$ 789,896;9. At Dec 31, 2014 the following balances existed on the books of Rentro Corporation;Bonds Payable \$ 3,500,000Discount on Bonds Payable 280,000Interest Payable 84,000Unamortized bond issue costs 210,000;If the bonds are retired on January 1, 2015, at 102, what will Rentro report as a loss on redemption?;a) \$ 350,000b) \$ 472,500c) \$ 560,000d) \$ 644,000

Paper#43865 | Written in 18-Jul-2015

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