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<strong>Phoenix</strong> <strong>ACC</strong> <strong>291</strong> <strong>Week</strong> 3 <strong>Practice</strong><br />
<strong>Questions</strong> <strong>Chapter</strong> <strong>10</strong> <strong>Answers</strong><br />
(<strong>2017</strong>)<br />
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nix-acc-<strong>291</strong>-week-3-practicequestions-chapter-<strong>10</strong>-answers-<strong>2017</strong>/<br />
<strong>Phoenix</strong> <strong>ACC</strong> <strong>291</strong> <strong>Week</strong> 3 <strong>Practice</strong> <strong>Questions</strong> <strong>Chapter</strong> <strong>10</strong> <strong>Answers</strong> (<strong>2017</strong>)<br />
1. The time period for classifying a liability as current is one year or the operating cycle, whichever is<br />
2. Which one of the following is not a typical current liability?<br />
3. Buttner Company borrows $88,500 on September 1, 2014, from Harrington State Bank by signing an<br />
$88,500, 12%, one-year note. How much is accrued interest at December 31, 2014?<br />
4. Andre Company collected $4,515 from cash sales to customers, which includes both sales revenue<br />
and 5% sales taxes. How much should be recognized as sales revenue?<br />
5. The Jacksonville Jaguars sell season tickets to NFL football games. There are <strong>10</strong> home games during<br />
the season, which runs from August through December. During February, 65,000 season tickets were<br />
sold for $12,000,000 cash. Which account will be credited by the Jacksonville Jaguars upon receipt of the<br />
$12,000,000?<br />
6. How is the market value of a bond issuance determined?<br />
7. If the contractual rate of interest is lower than the market rate of interest, bonds will sell at a premium.<br />
8. What is the effect of amortizing a bond discount?<br />
9. Kant Corporation retires its $<strong>10</strong>0,000 face value bonds at <strong>10</strong>5 on January 1, following the payment of<br />
interest. The carrying value of the bonds at the redemption date is $<strong>10</strong>3,745. Which of the following is part<br />
of the entry to record the bond redemption?<br />
<strong>10</strong>. On January 1, Anthony Corporation issued $1,000,000, 14%, 5-year bonds with interest<br />
payable on December 31. The bonds sold for $1,072,096. The market rate of interest for these bonds was<br />
12%. On the first interest date, using the effective-interest method, how much is the debit entry to Bond<br />
Interest Expense?
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