61.Chang Co. issued a $50,000, 120-day, discounted note to Guarantee Bank. The discount rate is 6%. Assuming a360-day year, the cash proceeds to Chang Co. are
a. $49,750
b. $47,000
c. $49,000
d. $51,000
62.The journal entry to record the issuance of a note for the purpose of converting an existing account payable wouldbe
a.debit Cash; credit Accounts Payable
b.debit Accounts Payable; credit Cash
c.debit Cash; credit Notes Payable
d.debit Accounts Payable; credit Notes Payable
63.The journal entry used to record the issuance of an interest-bearing note for the purpose of borrowing funds for thebusiness is
a.debit Accounts Payable; credit Notes Payable
b.debit Cash; credit Notes Payable
c.debit Notes Payable; credit Cash
d.debit Cash and Interest Expense; credit Notes Payable
64.The journal entry used to record the issuance of a discounted note for the purpose of borrowing funds for thebusiness is
a.debit Cash and Interest Expense; credit Notes Payable
b.debit Cash and Interest Payable; credit Notes Payable
c.debit Accounts Payable; credit Notes Payable
d.debit Notes Payable; credit Cash
65.The journal entry used to record the payment of a discounted note is
a.debit Notes Payable and Interest Expense; credit Cash
b.debit Notes Payable; credit Cash
c.debit Cash; credit Notes Payable
d.debit Accounts Payable; credit Cash
66.The journal entry to record the payment of an interest-bearing note is
a.debit Cash; credit Notes Payable
b.debit Accounts Payable; credit Cash
c.debit Notes Payable and Interest Expense; credit Cash
d.debit Notes Payable and Interest Receivable; credit Cash
67.A current liability is a debt that is reasonably expected to be paid
a.between 6 months and 18 months
b.out of currently recognized revenues
c.within one year
d.out of cash currently on hand
68.Taylor Bank lends Guarantee Company $150,000 on January 1. Guarantee Company signs a $150,000, 8%, 9-month note. The entry made by Guarantee Company on January 1 to record the proceeds and issuance of the noteis
a. Interest Expense
|
12,000
|
|
Cash
|
138,000
|
|
Notes Payable
|
|
150,000
|
b. Cash150,000
Notes Payable150,000
c. Cash
|
162,000
|
|
Interest Expense
|
|
12,000
|
Notes Payable
|
|
150,000
|
d. Notes Payable
|
120,000
|
|
Interest Payable
|
7,200
|
Cash
|
|
120,000
|
Interest Expense
|
|
7,200
|
69.The journal entry to record the conversion of a $6,300 accounts payable to a notes payable would be
a.Cash6,300
Notes Payable6,300
b.Notes Receivable6,300
Notes Payable6,300
c.Notes Payable6,300
Cash6,300
d.Accounts Payable6,300
Notes Payable6,300
70.Current liabilities are
a.due and receivable within one year
b.due and to be paid out of current assets within one year
c.due, but not payable for more than one year
d.payable if a possible subsequent event occurs