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9. (TCO D) Jenkins Corporation has $2,500,000 of short-term debt it
expects to retire with proceeds from the sale of 75,000 shares of
common stock. If the stock is sold for $20 per share subsequent to the
balance sheet date, but before the balance sheet is issued, what
amount of short-term debt could be excluded from current liabilities?
(Points: 5)
10. (TCO D) Tender Foot Inc. is involved in litigation regarding a
faulty product sold in a prior year. The company has consulted with its
attorney and determined that it is possible that they may lose the case.
The attorneys estimated that there is a 40% chance of losing. If this is
the case, their attorney estimated that the amount of any payment
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 straightline 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)