Hi, I am practicing and I would like a tutor to profread the attached document. Its a MCQ and my answers have been highlighted in green. Thanks

Hi,

I am practicing and I would like a tutor to profread the attached document. Its a MCQ and my answers have been highlighted in green.

Thanks

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ACCOUNTING EXERCISE
MC Questions
1.
The account Discount on Notes Payable is:
a.
a contingent liability.
b.
an asset because it has a debit balance.
c.
a contra liability.
d.
amortized to reduce interest expense over the life of a note.
2.
On July 1, Tau, Inc., purchased a machine for $12,000 and issued in payment a one-year note payable for
$13,200.
On August 31, the company’s fiscal year-end, the proper entry would be:
a.
Interest Expense
200
Discount on Notes Payable
200
b.
Machinery
200
Interest Expense
200
c.
Discount on Notes Payable
200
Interest Expense
200
d.
Notes Payable
200
Discount on Notes Payable
200
3.
Moore Realty just completed the purchase of an apartment complex on August 1 for $100,000 down and an
11%, 20-year, $400,000 mortgage note.
The note requires monthly principal and interest payments of
$4,129, with interest computed on the unpaid note balance.
The entry to record the September 1 payment
would be:
a.
Mortgage Note Payable
4,129
Cash
4,129
b.
Interest Expense
2,064
Mortgage Note Payable
2,065
Cash
4,129
c.
Interest Expense
454
Mortgage Note Payable
3,667
Cash
4,129
d.
Interest Expense
3,667
Mortgage Note Payable
462
Cash
4,129
4.
On March 1, 19X4, Grand Junction Railroad issued $50,000 of 8%, 10-year bonds dated March 1 for
$43,769.
Interest is payable on March 1 and September 1.
If Grand Junction uses the straight-line method
of amortization, how would these bonds appear on the September 1, 19X4, balance sheet?
(Round all
calculations to the nearest dollar.)
a.
Long-term liabilities:
Bonds payable
$50,000
Less: Discount on bonds payable
6,231
$43,769
b.
Long-term liabilities:
Bonds payable
$43,769
Plus: Discount on bonds payable
6,231
$50,000
c.
Long-term liabilities:
Bonds payable
$50,000
Less: Discount on bonds payable
5,919
$44,081
d.
Long-term liabilities:
Bonds payable
$44,081
Plus: Discount on bonds payable
5,919
$50,000

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5.
Milton Corporation has 20,000 shares of $5 par-value common stock and 60,000 shares of 9%, $2 par-
value preferred stock issued and outstanding.
The preferred stock is cumulative.
How much are preferred
dividends per year?
a.
$10,800.
b.
$120,000.
c.
$100,000.
d.
$9,000.
6.
Media Services’ accounting records reflected the following journal entry:
Nov. 1
Cash
14,000
Common Stock ($1 Par)
2,000
Paid-in Capital in
Excess of
Par Value
12,000
From the entry, one can conclude that the company:
a.
earned $14,000 of revenue.
b.
has a $12,000 gain on the sale of its stock.
c.
has a $12,000 increase in total paid-in capital.
d.
sold 2,000 shares of common stock at $7 per share.
7.
How is treasury stock shown in the financial statements?
a.
As an asset.
b.
As a reduction of paid-in capital.
c.
As a reduction of total stockholders’ equity.
d.
It depends on the reason that the treasury stock was acquired.
8.
Prost Products has excelled on past treasury stock transactions, selling the stock at above cost resulting in a
balance of $1,250 in
Paid in Capital from Treasury Stock account.
Currently, the company is holding 460
shares of its $2 par-value common stock, reacquired for $2,000.
If the stock is reissued for $500, what
journal entry will the company’s accountant make?
a.
Cash
500
Treasury Stock
500
b.
Cash
500
Loss on Treasury Stock
1,500
Treasury Stock
2,000
c.
Cash
500
Paid-in Capital from Treasury
Stock
1,500
Treasury Stock
2,000
d.
Cash
500
Paid-in Capital from Treasury
Stock
1,250
Retained Earnings
250
Treasury Stock
2,000
9.
The following journal entry was found in the accounting records of the Sullivan Corp.:
Retained Earnings
10,000
Dividends payable
10,000
On what date would the entry have been made?
a.
Date of declaration.
b.
Date of record.
c.
Ex-dividend date.
d.
Date of payment.

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