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would be $500,000. What is the required journal entry as a result of
this litigation? (Points: 5)
11. (TCO D) If bonds are initially sold at a discount and the straight-
line method of amortization is used, interest expense in the earlier
years will (Points: 5)
12. (TCO D)When the interest payment dates of a bond are May 1 and
November 1, and a bond issue is sold on June 1, the amount of cash
received by the issuer will be (Points: 5)
13. (TCO D) Feller Company issues $20,000,000 of ten-year, 9%
bonds on March 1, 2010 at 97 plus accrued interest. The bonds are
dated January 1, 2010, and pay interest on June 30 and December 31.
What is the total cash received on the issue date? (Points: 5)
14. (TCO D) A company issues $20,000,000, 7.8%, 20-year bonds to
yield 8% on January 1, 2010. Interest is paid on June 30 and
December 31. The proceeds from the bonds are $19,604,145. What is
interest expense for 2011, using straight-line amortization? (Points: 5)
15. (TCO D) On January 1, Patterson Inc. issued $5,000,000, 9%
bonds for $4,695,000. The market rate of interest for these bonds is
10%. Interest is payable annually on December 31. Patterson uses the
effective-interest method of amortizing bond discount. At the end of
the first year, Patterson should report unamortized bond discount of
(Points: 5)
(TCO C) Sisco Co. purchased a patent from Thornton Co. for
$180,000 on July 1, 2008. Expenditures of $68,000 for successful
litigation in defense of the patent were paid on July 1, 2011. Sisco
estimates that the useful life of the patent will be 20 years from the
date of acquisition.