Jackson Mechanics issues $2,000,000 of bonds with nondetachable stock warrants. For the investors, this means that the bondholders ________
A) will own both the bonds and the stock
B) will own either the bonds or the stock
C) can sell the bonds and keep the stock warrants
D) can sell the stock warrants and keep the bonds
Answer: B
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A company receives payment from one of its customers on August 5 for services performed on July 21. Which of the following entries would be recorded if the company uses accrual basis accounting?
A) Cash 1,000 Accounts Receivable 1,000 B) Salaries Expense 1,000 Cash 1,000 C) Cash 1,000 Service Revenue 1,000 D) Supplies 1,000 Cash 1,000
On January 1, Abbie Corporation issued $500,000 of 12%, 6 year bonds with interest payable semi-annually on June 30 and December 31. The bonds were issued for $530,000. Using the straight line method, on the first interest date, the debit to Interest Expense is for:
A. $27,500 B. $30,000 C. $31,800 D. $32,500