Can anyone help me with these homework questions? I have put the answers to the multiple choice questions below, so please think of them as a, b, c, d, format. Thank you in advance.
1) Z Co. filed suit against W, Inc. in 2011 seeking damages for patent infringement. At December 31, 2011, legal counsel for Z believed that it was probable that Z would be successful against W for an estimated amount in the range of $30 million to 60 million, with each amount in that range considered equally likely. Z was awarded $40 million in April 201. Z should report this award in its 2011 financial statements, issued in March, 2012 as:
A) A receivable and unearned revenue of $40 million.
B) A receivable and revenue of $40 million
C) A disclosure of a gain contingency of $40 million
D) A disclosure of a gain contingency of an undetermined amount in the range of $30 million to $60 million
2) During the year, Franklin Corporation incurred the following costs in connection with the issuance of bonds:
Printing and engraving-30,000
Legal fees- 160,000
Fees paid to independent accounts for registration information-20,000
Commissions paid to underwriter-300,000
The amount recorded as a deferred Charge to be amortized over the term of the bond is
A)0.
B)30,000
C)300,000
D)510,000
3) Swanson Company purchased $400,000 of Malone Corp. 10 year bonds with a coupon interest rate of 8 percent payable semi-annually. At the time the bonds were purchased, the market interest rate was 12 percent. The amount of premium or discount on the purchase of the bonds, rounded to the nearest whole dollar is:
A) 91,759 Premium
B)91,759 Discount
C)92,442 Premium
D)92,442 Discount
4) Cute shoes issued a 20,000, 7-month, "noninterest-bearing note." The loan was made by Second Commercial Bank whose stated "discount rate" is 6%. The effective interest rate on this loan (rounded) is:
A)6.38%
B)6.2
C)7.25
D)9.57