ACC Final Exam Questions with Correct
Solutions
current liability, long-term liability, or both?
A note payable for $100,000 due in 2 years. - Answer-long-term liability
current liability, long-term liability, or both?
A 10-year mortgage payable of $200,000 payable in ten $20,000 annual payments. - Answer-both
current liability, long-term liability, or both?
Interest payable of $15,000 on the mortgage. - Answer-current liability
current liability, long-term liability, or both?
Accounts payable of $60,000. - Answer-current liability
Monty Corp. borrows $68,400 on July 1 from the bank by signing a $68,400, 8%, 1-year note payable. -
Answer-cash 68400 dr
notes payable 68400 cr
, to record accrued interest:
interest expense 2736 dr
interest payable 2736 cr
math: 68400/ .08 * (6/12)
Kingbird University sells 3,000 season basketball tickets at $40 each for the entire 10-game home
schedule. - Answer-Entry for sale of season tickets:
cash 120000 dr
unearned ticked revenue 120000 cr
math: 3,000 * 40
revenue after first game entry:
unearned ticket revenue 12,000 dr
ticket revenue 12,000 cr
math: 120,
june 1st - Borrows $63,000 from First National Bank by signing a 9-month, 12% note.
dec 31. interest expense - Answer-Interest Expense=$63,000 × 12% × 7/12 = $4,410
interest expense dr
interest payable cr
March 1 Pays principal and interest to First National Bank:
notes payable 63000 dr
interest payable 4410
interest expense 1260 (4410/7 = 630per month) (630 * 2 = 1260)
cash 68670 ( add up all)
The 12/31/22 entries decrease stockholders' equity (due to the expense) and increase liabilities (interest
payable).
Solutions
current liability, long-term liability, or both?
A note payable for $100,000 due in 2 years. - Answer-long-term liability
current liability, long-term liability, or both?
A 10-year mortgage payable of $200,000 payable in ten $20,000 annual payments. - Answer-both
current liability, long-term liability, or both?
Interest payable of $15,000 on the mortgage. - Answer-current liability
current liability, long-term liability, or both?
Accounts payable of $60,000. - Answer-current liability
Monty Corp. borrows $68,400 on July 1 from the bank by signing a $68,400, 8%, 1-year note payable. -
Answer-cash 68400 dr
notes payable 68400 cr
, to record accrued interest:
interest expense 2736 dr
interest payable 2736 cr
math: 68400/ .08 * (6/12)
Kingbird University sells 3,000 season basketball tickets at $40 each for the entire 10-game home
schedule. - Answer-Entry for sale of season tickets:
cash 120000 dr
unearned ticked revenue 120000 cr
math: 3,000 * 40
revenue after first game entry:
unearned ticket revenue 12,000 dr
ticket revenue 12,000 cr
math: 120,
june 1st - Borrows $63,000 from First National Bank by signing a 9-month, 12% note.
dec 31. interest expense - Answer-Interest Expense=$63,000 × 12% × 7/12 = $4,410
interest expense dr
interest payable cr
March 1 Pays principal and interest to First National Bank:
notes payable 63000 dr
interest payable 4410
interest expense 1260 (4410/7 = 630per month) (630 * 2 = 1260)
cash 68670 ( add up all)
The 12/31/22 entries decrease stockholders' equity (due to the expense) and increase liabilities (interest
payable).
