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 the following is considered cash ? 2 ) Bank overdrafts , if material , should be 3 ) Which of the following is NOT considered cash for financial reporting purposes ? 4 ) If a company employs the gross method of recording accounts receivable from customers , then sales discounts taken should be reported as 5 ) Which of the following methods of determining annual bad debt expense best achieves the matching concept ?