Answer:
The correct answer is letter "B": The proceeds of the bond issue entirely as debt.
Explanation:
Under the U.S. General Accepted Accounting Principles (<em>GAAP</em>) the issuance costs of bonds are ignored for reporting purposes but the amount of sales revenues is recorded as debt. The amortization of the bond can be calculated using the <em>effective interest method</em> or the <em>straight-line method</em>.
Answer:
$0 Gain or Loss
Explanation:
Given that,
Original cost of the equipment = $100,000
Accumulated depreciation on the equipment = $40,000
Book value of the equipment:
= Original cost of the equipment - Accumulated depreciation on the equipment
= $100,000 - $40,000
= $60,000
Gain/Loss = Sale value - Book value of the equipment
= $60,000 - $60,000
= $0
Therefore, the company should recognize a $0 Gain or Loss.
Law of diminishing return has a positive relationship with marginal cost
Explanation:
The law of diminishing returns implies that marginal cost will rise as output increases. Eventually, rising marginal cost will lead to a rise in average total cost.
Answer:
No options presented but the entry below should be right.
$2,600 worth of merchandise was purchased but $600 was returned so Net accounts receivable:
= 2,600 - 600
= $2,000
Company paid the full amount on July 12 which is within the 10 days required for a discount so they get a 3% discount:
= 2,000 * ( 1 - 3%)
= $1,940
Date Account details Debit Credit
July 12 Accounts Payable $2,000
Cash $1,940
Merchandise inventory $60
