Question :
71. Grayson Bank agrees to lend the Trust Company $100,000 January : 1251368
71. Grayson Bank agrees to lend the Trust Company $100,000 on January 1. Trust Company signs a $100,000, 8%, 9-month note. The entry made by Trust Company on January 1 to record the proceeds and issuance of the note is:
A. Interest Expense 8,000
Cash 92,000
Notes Payable 100,000
B. Cash 100,000
Notes Payable 100,000
C. Cash 108,000
Interest Expense 8,000
Notes Payable 108,000
D. Notes Payable 100,000
Interest Payable 6,000
Cash 100,000
Interest Expense 6,000
72. The journal entry to record the conversion of an $550 accounts payable to a notes payable would be:
A. Cash 550
Notes Payable 550
B. Notes Receivable 550
Notes Payable 550
C. Notes Payable 550
Cash 550
D. Accounts Payable 550
Notes Payable 550
73. Current liabilities are:
A. due and receivable within one year.
B. due and to be paid out of current assets within one year.
C. due, but not payable for more than one year.
D. payable if a possible subsequent event occurs.
74. Which of the following would most likely be classified as a current liability?
A. Two-year Notes Payable
B. Bonds Payable
C. Mortgage Payable
D. Unearned Rent
75. Assuming a 360-day year, when a $30,000, 90-day, 5% interest-bearing note payable matures, total payment will amount to:
A. $31,500
B. $1,500
C. $30,375
D. $375
76. The current portion of long-term debt should
A. be classified as a long-term liability.
B. not be separated from the long-term portion of debt.
C. be paid immediately.
D. be reclassified as a current liability.
77. On January 5, 2012, Garrett Company, a calendar-year company, issued $500,000 of notes payable, of which $100,000 is due on January 1 for each of the next five years. The proper balance sheet presentation on December 31, 2012, is
A. Current Liabilities, $500,000.
B. Current Liabilities, $100,000; Long-term Debt, $400,000.
C. Long-term Debt, $500,000
D. Current Liabilities, $400,000; Long-term Debt, $100,000.
78. On October 30, Seba Salon, Inc. issued a 90-day note with a face amount of $60,000 to Reyes Products, Inc. for merchandise inventory. Determine the proceeds of the note assuming the note is discounted at 8%.
A. $55,200
B. $64,800
C. $58,800
D. $61,200
79. Proper payroll accounting methods are important for a business for all the reasons below except
A. good employee morale requires timely and accurate payroll payments.
B. payroll is subject to various federal and state regulations.
C. to help a business with cash flow problems by delayed payments of payroll taxes to federal and state agencies.
D. payroll and related payroll taxes have a significant effect on the net income of most businesses.
80. The amount of federal income taxes withheld from an employee’s gross pay is recorded as a(n)
A. payroll expense
B. contra account
C. asset
D. liability
