Q1. A one-year, $22,800, 14% note is signed on April 1. If the note is repaid on December 1 of the same year, how much interest expense is incurred? (Do not round intermediate calculations.)
$3,192
$2,128
$2,394
$1,862
Q2. Your company sells $140,000 of bonds for an issue price of $131,600. Which of the following statements is correct?
The bond sold at a price of 47.00, implying a premium of $16,800.
The bond sold at a price of 94.00, implying a discount of $16,800.
The bond sold at a price of 94.00, implying a discount of $8,400.
The bond sold at a price of 47.00, implying a premium of $8,400.
[The following information applies to the questions displayed below.] A company issued $480,000, 12-year, 8 % bonds at 107.00.
Q3. What is the issue price of these bonds?
$513,600
$518,400
$446,400
$480,000
Q4. What is the total amount of interest expense that will be recorded over the life of these bonds?
$480,000
$427,200
$518,400
$513,600
Q4. Because interest rates have fallen, a company retires bonds which had been issued at their face value of $330,000. The company bought the bonds back at 96.25. The journal entry to record this retirement includes a debit of:
$330,000 to Bonds Payable, a credit of $12,375 to Interest Expense, and a credit of $317,625 to Cash.
$317,625 to Bonds Payable, a debit to Gain on Bond Retirement of $12,375 and a credit of $330,000 to Cash.
$330,000 to Bonds Payable, a credit of $12,375 to Gain on Bond Retirement, and a credit of $317,625 to Cash.
$317,625 to Bonds Payable and a credit of $317,625 to Cash.
Q5. On December 31, 2015, a company had assets of $21 billion and stockholders' equity of $18 billion. That same company had assets of $45 billion and stockholders' equity of $14 billion as of December 31, 2016. During 2016, the company reported total sales revenue of $14 billion and total expenses of $12 billion. What is the company's debt-to-assets ratio on December 31, 2016?
0.69
0.31
0.027
0.038
Q6. A company has current assets of $11.48 million and net income of $11.6 million. Current liabilities total $4.1 million, interest expense is $3.6 million, and income tax expense is $4.6 million. What is the times interest earned ratio for this company? (Round your final answer to 2 decimal places.)
0.36.
2.80.
0.40.
5.50.
Q7. A company issued 10-year, 6.50% bonds with a face value of $100,000. The company received $97,787 for the bonds. Using the straight-line method of amortization, the amount of interest expense for the first interest period is:
$6,721.30
$2,213.00
$6,278.70
$6,500.00