ACC 200 EXAM 3 QUESTIONS WITH VERIFIED
ANSWERS
On May 31st a store had cash sales of $30,000 and collected related sales taxes of
$1,500. What is the journal entry that the store records and what is the impact on the
accounting equation? - Answers - May 31 Dr. Cash 31,500
Cr. Sales Revenue 30,000
Cr. Sales Taxes Payable 1,500
A + 31,500 = L +1,500 + SE +30,000
What are secured bonds? - Answers - Bonds that have specific assets pledged as
collateral.
What are unsecured bonds? - Answers - Bonds that are issued against the general
credit of the borrower.
What are convertible bonds? - Answers - Bonds that can be converted into common
stock at the option of the bondholder.
What are callable bonds? - Answers - Bonds that can be redeemed (bought back) prior
to maturity at the option of the bond issuer.
Smith Co. loans Johnson Co. $500,000 on Jan 1, 2014. Terms: 6%, 10-month note, all
principal and interest paid Oct. 31, 2014.
What is the journal entry for June 30th? - Answers - Dr. Interest Expense (500k X 6% X
6/12)
Cr. Interest Payable (500k X 6% X 6/12)
What else is the contract rate called? - Answers - Stated or Coupon
What else is the market rate called? - Answers - Effective or discount
Issued bonds at a premium JE accounts - Answers - Dr. Cash
Cr. Bonds Payable
Cr. Premium on Bonds Payable
Bond Presentation on a balance sheet for Premium - Answers - Bonds Payable
Add: Premium on Bonds Payable
Equals: Bond Carrying Value
Issued bonds at a discount JE accounts - Answers - Dr. Cash
Dr. Discount on Bonds Payable
ANSWERS
On May 31st a store had cash sales of $30,000 and collected related sales taxes of
$1,500. What is the journal entry that the store records and what is the impact on the
accounting equation? - Answers - May 31 Dr. Cash 31,500
Cr. Sales Revenue 30,000
Cr. Sales Taxes Payable 1,500
A + 31,500 = L +1,500 + SE +30,000
What are secured bonds? - Answers - Bonds that have specific assets pledged as
collateral.
What are unsecured bonds? - Answers - Bonds that are issued against the general
credit of the borrower.
What are convertible bonds? - Answers - Bonds that can be converted into common
stock at the option of the bondholder.
What are callable bonds? - Answers - Bonds that can be redeemed (bought back) prior
to maturity at the option of the bond issuer.
Smith Co. loans Johnson Co. $500,000 on Jan 1, 2014. Terms: 6%, 10-month note, all
principal and interest paid Oct. 31, 2014.
What is the journal entry for June 30th? - Answers - Dr. Interest Expense (500k X 6% X
6/12)
Cr. Interest Payable (500k X 6% X 6/12)
What else is the contract rate called? - Answers - Stated or Coupon
What else is the market rate called? - Answers - Effective or discount
Issued bonds at a premium JE accounts - Answers - Dr. Cash
Cr. Bonds Payable
Cr. Premium on Bonds Payable
Bond Presentation on a balance sheet for Premium - Answers - Bonds Payable
Add: Premium on Bonds Payable
Equals: Bond Carrying Value
Issued bonds at a discount JE accounts - Answers - Dr. Cash
Dr. Discount on Bonds Payable
