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Ch 7 Video Assignment 2 Questions & answers

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Ch 7 Video Assignment 2 Questions & answers

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  • July 3, 2024
  • 2
  • 2023/2024
  • Exam (elaborations)
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Ch 7 Video Assignment 2

Which of the following entities receives cash when a company borrows money through
a bond issue? - ANS-issuer

Both bonds payable and notes payable are obligations that usually arise from borrowing
money. This statement is - ANS-True

On January 1, Year 1, Residence Company issued bonds with a $50,000 face value.
The bonds were issued at face value. They had a 20 year term and a stated rate of
interest of 7%. Which of the following shows how the bond issue will affect Residence's
financial statements on January 1, Year 1? - ANS-Option C
50,000=50,000+NA NA-NA=NA 50,000 FA

On January 1, Year 1, Residence Company issued bonds with a $50,000 face value.
The bonds were issued at face value. They had a 20 year term and a stated rate of
interest of 7%. Which of the following shows how the recognition of interest expense will
affect Residence's financial statements on December 31, Year 14? - ANS-Option B
(3,500)=NA+(3,500) NA-3,500=(3,500) (3,500) OA

On January 1, Year 1, Residence Company issued bonds with a $50,000 face value.
The bonds were issued at face value. They had a 20 year term and a stated rate of
interest of 7%. Which of the following shows how the payoff of the bond liability will
affect Residence's financial statements on December 31, Year 20 (the maturity date)? -
ANS-Option D
(50,000)=(50,000)+NA NA-NA=NA (50,000) FA

A classified balance she separates assets and liabilities into categories that distinguish
between accounts that are identified as current from those that are identified as
long-term. This statement is - ANS-True

Which of the following would not likely appear on a classified balance sheet? -
ANS-Current retained earnings

The length of an operating cycle is the time it takes to turn cash into inventory, then
inventory into account receivable, and then accounts receivable back into cash. This
statement is - ANS-True

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