On January 2 of the current year , Cruises , Inc . borrowed $ 3 million at a rate of 10 % for three years and began construction of a cruise ship . The note states that annual payments of principal and interest in the amount of $ 1.3 million are due every December 31 . Cruises used all proceeds as a down payment for construction of a new cruise ship that is to be delivered two years after the start of construction . What should Cruise report as interest expense related to the note in its income statement for the second year ?
Question 13
Puff Co . acquired 40 % of Straw , Inc .' s voting common stock on January 2 , 2005 , for $ 400,000 . The carrying amount of Straw ' s net assets at the purchase date totaled $ 900,000 . Fair values equaled carrying amounts for all items except equipment , for which fair values exceeded carrying amounts by $ 100,000 . The equipment has a five year life . Goodwill , if any , is expected to have a useful life of 10 years . During 2005 , Straw reported net income of $ 150,000 . What amount of income from this investment should Puff report in its 2005 income statement ?
Question 14
The discount resulting from the determination of a note payable ' s present value should be reported on the balance sheet as a ( an )
Question 15
Land was purchased to be used as the site for the construction of a plant . A building on the property was sold and removed by the buyer so that construction on the plant could begin . The proceeds from the sale of the building should be
Question 16
Park Co . uses the equity method to account for its January 1 , 2004 , purchase of Tun Inc .' s common stock . On January 1 , 2004 , the fair