8. On the Balance Sheet the current portion of long-term debt should a. be paid immediately. b. be reclassified as a current liability. c. be classified as a long-term liability. d. not be separated from the longterm portion of debt.
9. Bonds that are subject to retirement at a stated dollar amount prior to maturity at the option of the issuer are called a. options. b. early retirement bonds. c. callable bonds. d. debentures.
10. The Muffin Company issued a five-year interest-bearing note payable for $ 50,000 on January 1, 2005. Each January the company is required to pay $ 10,000 on the note. How will this note be reported on the December 31, 2006, balance sheet? a. Long-term Debt, $ 50,000 b. Long-term Debt, $ 40,000 c. Long-term Debt, $ 30,000; Long-term Debt due within one year, $ 10,000 d. Long-term Debt of $ 40,000; Long-term Debt due within one year, $ 10,000
11. Toran Manufacturing declared an 10 % stock dividend when it had 150,000 shares of $ 5 par value common stock outstanding. The market price per common share was $ 12 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to a. Retained Earnings of $ 180,000. b. Paid-in Capital in Excess of Par for $ 105,000. c. Common Stock for $ 180,000. d. Retained Earnings for $ 75,000.
12. Richer Company paid $ 21,000 to buy 4,000 shares of its $ 6 par value common stock for the treasury. The stock was originally sold for $ 25,000. The entry to record the purchase includes a a. debit to Treasury Stock for $ 21,000. b. credit to Treasury Stock for $ 25,000.