ACC 101 Final Exam Review || Already Graded A+.
1. Mannix Company issued $1,000,000 of 5%, 5-year bonds at 98. Assuming straight-line
amortization and annual interest payments, how much bond interest expense is recorded on the
next interest date? correct answers $54,000
2. Mannix Company issued $1,000,000 of 5%, 5-year bonds at 105. Assuming straight-line
amortization and annual interest payments, how much bond interest expense is recorded on the
next interest date? correct answers $40,000
3. If the market rate of interest is 10%, a $100,000, 8%, 10-year bond that pays interest annually
would sell at an amount correct answers less than face value.
4. West County Bank agrees to lend Drake Builders Company $400,000 on January 1. Drake
Builders Drake Builders Company signs a $400,000, 6%, 6-month note. The entry made by
Drake builders Company on January 1 to record the proceeds and issuance of the note is correct
answers Cash............................ 400,000 Notes
Payable...............................................................................400,000
5. Bonds with a face value of $600,000 and a quoted price of 981⁄2 have a selling price of correct
answers $591,000.
6. Johnson Company issued $100,000 of 6%, 5-year bonds at 95. Assuming straight-line
amortization and annual interest payments, what is the amount recorded to Discount on Bonds
Payable at each interest payment point? correct answers $1,000
7. A cash register tape shows cash sales of $3,000 and sales taxes of $200. The journal entry to
record this information is correct answers Cash................................ 3,200
Sales Tax Payable.....................................................................200 Sales
Revenue......................................................................... 3,000
8. The interest charged on a $300,000 note payable, at the rate of 6%, on a 90-day note would be
correct answers $4,500.
9. Love Inc. began business by issuing 100,000 shares of $10 par value common stock for $30
per share. During its first year, the corporation sustained a net income of $10,000. The year-end
balance sheet would show correct answers Common Stock of $1,000,000
10. Which of the following statements is considered an advantage of the corporate form of
organization? correct answers Limited liability of stockholders.
11. If Lantz Company issues 10,000 shares of $5 par value common stock for $210,000, the
account correct answers Common Stock will be credited for $50,000.
12. The board of directors of Yancey Company declared a cash dividend of $1.50 per share on
42,000 shares of common stock on July 15, 20X1. The dividend is to be paid on August 15,
