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30) Which of the following is a correct statement of one of the
capitalization criteria?
31) Discount on notes payable is charged to interest expense
32) The generally accepted method of accounting for gains or losses
from the early extinguishment of debt treats any gain or loss as
33) A corporation borrowed money from a bank to build a building. The
long-term note signed by the corporation is secured by a mortgage that
pledges title to the building as security for the loan. The corporation is to
pay the bank $80,000 each year for 10 years to repay the loan. Which of
the following relationships can you expect to apply to the situation?
34) Benton Company issues $10,000,000 of 10-year, 9% bonds on
March 1, 2007, at 97 plus accrued interest. The bonds are dated January
1, 2007, and pay interest on June 30 and December 31. What is the total
cash received on the issue date?
35) Limeway Company issues $5,000,000, 6%, 5-year bonds dated
January 1, 2007, on January 1, 2007. The bonds pay interest
semiannually on June 30 and December 31. The bonds are issued to
yield 5%. What are the proceeds from the bond issue?
36) A company issues $20,000,000, 7.8%, 20-year bonds to yield 8% on
January 1, 2007. Interest is paid on June 30 and December 31. The
proceeds from the bonds are $19,604,145. Using effective-interest
amortization, how much interest expense will be recognized in 2007?
37) Which of the following is not a characteristic of a defined-
contribution pension plan?