A company has current assets of 500000 net income of 10000

Question

Question 1: On July 1, 200X you enter into a note payable of $200,000 with a 5% annual interest rate. Your interest expense for 200X will be:

• $10,000.
• $2,500
• $2,000
• $5,000

Question 2: Post Company issues a 6 year, 6%, $200,000 bond at par on July 31. The journal entry would be:

• A debit to cash of $200,000 and a credit to bonds payable of $200,000.
• A debit to bonds payable of $200,000 and a credit to cash of $200,000.
• A debit to cash of $200,000 and a credit to bonds receivable of $200,000.
• A debit to bonds receivable of $200,000 and a credit to cash of $200,000.

Question 3: Post Company issues a 6 year, 6%, $200,000 bond at par on July 31. How much interest will be paid over the life of the bond?

• $4,000
• $6,000
• $12,000
• $72,000

Question 4: A company has current assets of $500,000, net income of $10,000, current liabilities of 250,000 and equity of $250,000. What is the current ratio?

• 0.5
• 7.5
• 0.3
• 2.0

Question 5: If a company has gross salaries of $12,000 and it withholds $1,800 for income taxes and $800 for FICA taxes, the journal entry to record the employee s pay should include:

• Debit to salary expense for $9,400
• Debit to salary payable for $9,400
• Credit to salary payable for $9,400
• Credit to cash for $12,000