Chapter 10 Accounting

Question 1

Bond payable - discount on bond = what?

Answer 1

Carrying value of the bond

Question 2

Do you add or subtract a premium on a bond when calculating the carrying value?

Answer 2

ADD

Question 3

Principle + total interest = what

Answer 3

maturity value

Question 4

Journal Entry : when issuing a note payable what would that look like?

Answer 4

Debit cash and credit note payable

Question 5

Journal Entry : Accruing interest expense look like

Answer 5

Debit interest expense and credit interest payable

Question 6

Journal Entry : Not payable at maturity look like

Answer 6

Debit note payable, interest payable, interest expense and credit cash at maturity value.

Question 7

Journal Entry : Sales tax payable look like

Answer 7

Debit cash and credit sales tax payable and sales revenue. ALSO include a separate debit to cost of goods sold and credit to inventory.

Question 8

Journal Entry : income tax payable look like

Answer 8

Debit wage and salary expense and credit income tax payable, FICA payable and cash

Question 9

Journal Entry : Issuing a bond at par value

Answer 9

Debit cash and credit bond payable.

Question 10

Journal Entry : Issuing a bond at a premium

Answer 10

Debit cash, credit bond payable and premium on bond.

Question 11

Journal Entry : Issuing a bond at discount

Answer 11

Debit cash, credit bond payable and debit discount on bond payable.

Question 12

When creating journal entries, your bond payable should ALWAYS what?

Answer 12

Be represented at face value. DO NOT write bond payable with discount or premium added on.

Question 13

A current liability will be paid in…

Answer 13

a year or less.

Question 14

Accrued interest on long-term debt is reported as what?

Answer 14

A current liability

Question 15

When calculating interest do you multiply it by the face value or discounted/premium value?

Answer 15

FACE VALUE