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24) The debit for a sales tax properly levied and paid on the purchase of
machinery preferably would be a charge to
25) On November 1, 2007, Little Company purchased 600 of the $1,000
face value, 9% bonds of Player, Incorporated, for $632,000, which
includes accrued interest of $9,000. The bonds, which mature on January
1, 2012, pay interest semiannually on March 1 and September 1.
Assuming that Little uses the straight-line method of amortization and
that the bonds are appropriately classified as available-for-sale, what
would the net carrying value of the bonds be shown as on Little's
December 31, 2007, balance sheet?
26) On October 1, 2007, Lyman Co. purchased to hold to maturity, 200
of the $1,000 face value, 9% bonds for $208,000. An additional $6,000
was paid for accrued interest. Interest is paid semiannually on December
1 and June 1 and the bonds mature on December 1, 2011. Lyman uses
straight-line amortization. Ignoring income taxes, what was the amount
reported in Lyman's 2007 income statement from this investment?
27) On October 1, 2007, Porter Co. purchased to hold to maturity 1,000
of the $1,000 face value, 9% bonds for $990,000 which includes
$15,000 accrued interest. The bonds, which mature on February 1, 2016,
pay interest semiannually on February 1 and August 1. Porter uses the
straight-line method of amortization. The bonds should be reported in
the December 31, 2007 balance sheet at a carrying what value?
28) Although only certain leases are currently accounted for as a sale or
purchase, there is theoretic justification for considering all leases to be
sales or purchases. The principal reason that supports this idea is that
29) An essential element of a lease conveyance is that the