Northern Railroad. On August 10, 2012, due to the admitted negligence
of the Railroad, hay on the farm was set on fire and burned. Beck had
had a dispute with the Railroad for several years concerning the
ownership of a small parcel of land. The representative of the Railroad
has offered to assign any rights which the Railroad may have in the land
to Beck in exchange for a release of his right to reimbursement for the
loss he has sustained from 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