the fire. Beck appears inclined to accept the Railroad’s offer. The
Railroad’s 2012 financial statements should include the following
related to the incident: A). recognition of a loss only. B). creation of a
liability only. C). disclosure in note form only. D). recognition of a loss
and creation of a liability for the value of the land. Question 26 Roley
Corporation uses a periodic inventory system and the gross method of
accounting for purchase discounts. On July 1, Roley purchased $66,000
of inventory, terms 2/10, n/30, FOB shipping point. Roley paid freight
costs of $1,210. On July 3, Roley returned damaged goods and received
credit of $6,600. On July 10, Roley paid for the goods. Prepare all
necessary journal entries for Roley. Question 27 Takemoto Corporation
borrowed $93,000 on November 1, 2012, by signing a $95,093, 3-
month, zero-interest-bearing note. Prepare Takemoto’s November 1,
2012, entry; the December 31, 2012, annual adjusting entry; and the
February 1, 2013, entry. (For multiple debit/credit en tries, list amounts
from largest to smallest, e.g. 10, 8, 6. Round all answers to 0 decimal
places, e.g. 11,150.) Question 28 Whiteside Corporation issues $629,000
of 9% bonds, due in 14 years, with interest payable semiannually. At the
time of issue, the annual market rate for such bonds is 10%. Compute
the issue price of the bonds.(Use the present value tables in the text.
Question 29 Indiana Jones Company enters into a 6-year lease of
equipment on January 1, 2012, which requires 6 annual payments of
$37,560 each, beginning January 1, 2012. In addition, the lessee
guarantees a residual value of $20,870 at lease-end. The equipment has a
useful life of 6 years. Assume that for Lost Ark Company, the lessor,
collectibility is reasonably predictable, there are no important
uncertainties concerning costs, and the carrying amount of the
machinery is $191,722. Prepare Lost Ark’s January 1, 2012, journal
entries. Question 30 On January 1, 2012, Irwin Animation sold a truck to
Peete Finance for $26,050 and immediately leased it back. The truck
was carried on Irwin’s books at $20,800. The term of the lease is 5
years, and title transfers to Irwin at lease-end. The lease requires five
equal rental payments of $7,048 at the end of each year. The appropriate
rate of interest is 11%, and the truck has a useful life of 5 years with no
salvage value. Prepare Irwin’s 2012 journal entries. SET 2 1) Which of