111.If a company borrows money from a bank as an installment note, the interest portion of each annual payment will
a.equal the interest rate on the note times the carrying amount of the note at the beginning of the period
b.remain constant over the term of the note
c.equal the interest rate on the note times the face amount
d.increase over the term of the note
112.On the first day of the fiscal year, Hawthorne Company obtained an $88,000, 7-year, 5% installment note from SeaSide Bank. The note requires annual payments of $15,208, with the first payment occurring on the last day of thefiscal year. The first payment consists of interest of $4,400 and principal repayment of $10,808. The journal entryHawthorne would record to make the first annual payment due on the note would include a
a.debit to cash for $15,208
b.credit to notes payable for $10,808
c.debit to interest expense for $4,400
d.debit to notes payable for $15,208
113.On January 1, Gemstone Company obtained a $165,000, 10-year, 7% installment note from Guarantee Bank. Thenote requires annual payments of $23,492, with the first payment occurring on the last day of the fiscal year. Thefirst payment consists of interest of $11,550 and principal repayment of $11,942. The journal entry to record thepayment of the first annual amount due on the note would include a
a.debit to cash for $11,942
b.credit to interest payable for $11,550
c.debit to notes payable for $11,942
d.debit to interest expense for $23,492
114.On January 1, Gemstone Company obtained a $165,000, 10-year, 7% installment note from Guarantee Bank. Thenote requires annual payments of $23,492, with the first payment occurring on the last day of the fiscal year. Thefirst payment consists of interest of $11,550 and principal repayment of $11,942. The journal entry to record theissuance of the installment note for cash on January 1 would include a
a.debit to interest expense for $11,550
b.credit to interest payable for $11,550
c.credit to notes payable for $165,000
d.debit to notes payable for $165,000
115.On January 1, Zero Company obtained a $52,000, 4-year, 6.5% installment note from Regional Bank. The noterequires annual payments consisting of principal and interest of $15,179, beginning on December 31 of the currentyear. The December 31, Year 1 carrying amount in the amortization table for this installment note will be equal to:
a. $27,635
b. $40,201
c. $36,821
d. $48,620
116.On January 1, Year 1, Zero Company obtained a $52,000, 4-year, 6.5% installment note from Regional Bank. Thenote requires annual payments of $15,179, beginning on December 31, Year 1. The December 31, Year 2 carryingamount in the amortization table for this installment note will be equal to
a. $26,000.
b. $27,635
c. $21,642
d. $28,402
117.On January 1, Year 1, Zero Company obtained a $52,000, 4-year, 6.5% installment note from Regional Bank. Thenote requires annual payments of $15,179, beginning on December 31, Year 1. The December 31, Year 3 carryingamount in the amortization table for this installment note will be equal to
a.$0
b. $13,000
c. $14,252
d. $16,603
118.An installment note payable for a principal amount of $94,000 at 6% interest requires Lawson Company to repaythe principal and interest in equal annual payments of $22,315 beginning December 31, of the first year, for each ofthe next five years. After the final payment, the carrying amount on the note will be
a. $1,263
b. $21,053
c. $22,315
d.$0
119.Any unamortized premium should be reported on the balance sheet of the issuing corporation as
a.a direct deduction from the face amount of the bonds in the liabilities section
b.as paid-in capital
c.a direct deduction from retained earnings
d.an addition to the face amount of the bonds in the liabilities section
120.The balance in Discount on Bonds Payable that is applicable to bonds due in three years would be reported on thebalance sheet in the section entitled
a.investments
b.long-term liabilities
c.current assets
d.intangible assets