Question : 11. Jensen CompanyJensen Company has the following information for the pay : 1224951

11. Jensen CompanyJensen Company has the following information for the pay period of December 15 – 31, 2012:

Salaries

$10,000

Federal income tax

$1,500

State income tax

$1,200

FICA

$565

Refer to the information provided for Jensen Company. Salaries are paid on December 31, 2012. On December 31st, Cash would be recorded for: A. $8,500.B. $10,000.C. $6,735.D. $7,300.

12. Jensen CompanyJensen Company has the following information for the pay period of December 15 – 31, 2012:

Salaries

$10,000

Federal income tax

$1,500

State income tax

$1,200

FICA

$565

Refer to the information provided for Jensen Company. Salaries are paid on December 31, 2012. On December 31st, Salaries Expense would be recorded for: A. $10,000.B. $8,500.C. $6,735.D. $7,750.

13. Long-term liabilities generally include: A. liabilities related to long-term assets.B. accounts payable, because they are interest-bearing.C. obligations that extend beyond one year.D. accrued expenses.

14. Bonds are sold at a premium if the: A. issuing company has a better reputation than other companies in the same business.B. market rate of interest was less than the stated rate at the time of issue.C. market rate of interest was more than the stated rate at the time of issue.D. market rate of interest was same as the stated rate at the time of issue.

15. When will bonds sell at a discount? A. The credit standing of the issuing company is not as good as other companies in a similar line of business.B. The stated rate of interest is less than the market rate of interest at the time of issue.C. The stated rate of interest is more than the market rate of interest at the time of issue.D. The stated rate of interest is same as the market rate of interest at the time of issue.

16. When bonds are issued by a company, the accounting entry shows an: A. increase in liabilities and a decrease in equity.B. increase in liabilities and an increase in equity.C. increase in assets and an increase in liabilities.D. increase in assets and an increase in equity.

17. When bonds are sold for less than the face amount, this means that the: A. maturity value will be less than the face amount.B. maturity value will be greater than the face amount.C. bonds are sold at a premium.D. stated rate of interest is less than the market rate of interest.

18. The Discount on Bonds Payable account is shown on the balance sheet as: A. an asset.B. an expense.C. a contra-liability.D. as a reduction in equity for the discount provided.

19. The Premium on Bonds Payable account is shown on the balance sheet as: A. a contra asset.B. a reduction of an expense.C. as an increase in equity for the premium provided.D. an addition to a long-term liability.

20. Paris Company issued bonds in the amount of $500,000 with a stated interest rate of 8%. If the interest is paid semiannually and the bonds are due in 10 years, what would be the total amount of interest paid over the life of the bonds? A. $500,000B. $200,000C. $400,000D. $  40,000