Questions from Financial Accounting

Q: Buffalo Bell’s long-term debt bears interest at 11%. During

Buffalo Bell’s long-term debt bears interest at 11%. During the year ended December 31, 2012, Bell’s times-interest-earned ratio was a. 137.9 times. b. $35,147. c....

Q: Using the facts in the preceding question, McPherson’s journal entry to

Using the facts in the preceding question, McPherson’s journal entry to record the interest expense on July 1, 2012, will include a a. Debit to Bonds Payable. b. Credit to Interest Expense. c. Credit...

Q: Amortizing the discount on bonds payable a. Is necessary only

Amortizing the discount on bonds payable a. Is necessary only if the bonds were issued at more than face value. b. Reduces the carrying value of the bond liability. c. Increases the recorded amount of...

Q: The journal entry on the maturity date to record the payment of

The journal entry on the maturity date to record the payment of $1,500,000 of bonds payable that were issued at a $70,000 discount includes a. A debit to Discount on Bonds Payable for $70,000. b. A cr...

Q: Is the payment of the face amount of a bond on its

Is the payment of the face amount of a bond on its maturity date regarded as an operating activity, an investing activity, or a financing activity? a. Financing activity b. Operating activity c. Inves...

Q: Wardlow Sales, Inc.’s comparative income statements and balance sheets

Wardlow Sales, Inc.’s comparative income statements and balance sheets show the following selected information for 2011 and 2012: Requirements 1. Calculate the companyâ€...

Q: Trail Runner USA guarantees tires against defects for five years or 55

Trail Runner USA guarantees tires against defects for five years or 55,000 miles, whichever comes first. Suppose Trail Runner USA can expect warranty costs during the five-year period to add up to 5%...

Q: Refer to the data given in Short Exercise 9-3.

Refer to the data given in Short Exercise 9-3. What amount of warranty expense will Trail Runner USA report during 2012? Which accounting principle addresses this situation? Does the warranty expense...

Q: Tony Chase, Inc., the motorcycle manufacturer, included the following

Tony Chase, Inc., the motorcycle manufacturer, included the following note in its annual report: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7 (In Part): Commitments and Contingencies The Company self-...

Q: Compute the price of the following bonds: a. $

Compute the price of the following bonds: a. $200,000 issued at 77.75 b. $200,000 issued at 103.50 c. $200,000 issued at 94.25 d. $200,000 issued at 102.50