BUS 212 WEEK 3 QUIZ
The time period for classifying a liability as current is one year or the operating
cycle, whichever is
Longer
Which one of the following is not a typical current liability?
Mortgages payable
Buttner Company borrows $88,500 on September 1, 2017, from Harrington State
Bank by signing an $88,500, 12%, one-year note. How much is accrued interest at
December 31, 2017?
$3,540
How is the market value of a bond issuance determined?
By adding the present value of the principal amount to the present value of the
interest payments
If the contractual rate of interest is lower than the market rate of interest, bonds
will sell at a premium.
False
What is the effect of amortizing a bond discount?
It increases the carrying value of the bonds.
Cuso Inc. issues 10-year bonds with a maturity value of $200,000. If the bonds are
issued at a premium, what does this indicate?
The time period for classifying a liability as current is one year or the operating
cycle, whichever is
Longer
Which one of the following is not a typical current liability?
Mortgages payable
Buttner Company borrows $88,500 on September 1, 2017, from Harrington State
Bank by signing an $88,500, 12%, one-year note. How much is accrued interest at
December 31, 2017?
$3,540
How is the market value of a bond issuance determined?
By adding the present value of the principal amount to the present value of the
interest payments
If the contractual rate of interest is lower than the market rate of interest, bonds
will sell at a premium.
False
What is the effect of amortizing a bond discount?
It increases the carrying value of the bonds.
Cuso Inc. issues 10-year bonds with a maturity value of $200,000. If the bonds are
issued at a premium, what does this indicate?
