On April 1, 2019, Flamengo Co. signed a one-year, 8% interest-bearing note payable for $50,000. Assuming that Flamengo Co. maintains its books on a calendar year basis, how much interest expense should be reported in the 2020 income statement?

a.$1,000.

B.$2,000.

C.$4,000.

D.$3,000.

Which of the alternatives results from the accrual of interest:

A.Increase in liabilities and decrease in stockholders' equity.

B.Increase in assets and stockholders' equity.

C.Increase in assets and liabilities.

D.Increase in liabilities and increase in stockholders' equity.

Unfortunately, Flamengo Co. is involved in a lawsuit. When would the lawsuit be recorded as a liability on the balance sheet?

A.When the loss is probable and the amount can be reasonably estimated.

B.When the loss probability is reasonably possible and the amount can be reasonably estimated.

C.When the loss is probable regardless of whether the loss can be reasonably estimated.

D.When the loss probability is remote and the amount can be reasonably estimated.

Rice Corporation's attorney has provided the following summaries of three lawsuits against Rice:

• Lawsuit A: The loss is probable, but the loss cannot be reasonably estimated.

• Lawsuit B: The loss is remote and the loss cannot be reasonably estimated.

• Lawsuit C: The loss is reasonably possible and can be reasonably estimated.

Which of the following statements is correct?

A.A disclosure note is required only for lawsuit A.

B.A disclosure note is required only for lawsuits B & C.

C.A disclosure note is required only for lawsuits A & C.

D.A disclosure note is required for each of the three lawsuits.

On January 1, 2021, Flamengo Co. issued a four-year, $10,000, 7% bond. The interest is payable annually each December 31. The market interest rate is 8%. Flamengo uses the straight-line amortization method.

What is the total discount of this bond?

Round to the nearest cent (for example, if 54.238 then type 54.24)

On January 1, 2021, Flamengo Co. issued a four-year, $10,000, 7% bond. The interest is payable annually each December 31. The market interest rate is 8%. Flamengo uses the straight-line amortization method.

What is the amount that Flamengo will amortize on December 31, 2022?

Round to the nearest cent (for example, if 54.238 then type 54.24)

On January 1, 2021, Flamengo Co. issued a four-year, $10,000, 7% bond. The interest is payable annually each December 31. The market interest rate is 8%. Flamengo uses the straight-line amortization method.

How much interest will Flamengo pay to the bondholders on December 31 2022?

Round to the nearest cent (for example, if 54.238 then type 54.24)

On January 1, 2021, Flamengo Co. issued a four-year, $10,000, 7% bond. The interest is payable annually each December 31. The market interest rate is 8%. Flamengo uses the straight-line amortization method.

How much cash will Flamengo receive on January 1, 2021 from issuing this bond?

Round to the nearest cent (for example, if 54.238 then type 54.24)

On January 1, 2021, Flamengo Co. issued a four-year, $10,000, 7% bond. The interest is payable annually each December 31. The market interest rate is 8%. Flamengo uses the straight-line amortization method.

The interest expense on the income statement for the year ended December 31, 2021 is:

Round to the nearest cent (for example, if 54.238 then type 54.24)

On July 1, 2019, Vasco Co. issued $300,000 of ten-year, 7% bonds for $303,000. The bonds were dated July 1, 2019, and annual interest will be paid each June 30. Vasco Co. uses the straight-line method of amortization.

What is the amount of the annual interest expense?

Round to the nearest cent (for example, if 54.238 then type 54.24)..

On July 1, 2019, Vasco Co. issued $300,000 of ten-year, 7% bonds for $303,000. The bonds were dated July 1, 2019, and annual interest will be paid each June 30. Vasco Co. uses the straight-line method of amortization.

How much interest will Vasco pay to the bondholders on June 30 2022?

Round to the nearest cent (for example, if 54.238 then type 54.24)

On July 1, 2019, Vasco Co. issued $300,000 of ten-year, 7% bonds for $303,000. The bonds were dated July 1, 2019, and annual interest will be paid each June 30. Vasco Co. uses the straight-line method of amortization.

What is the amount that Vasco will amortize on June 30, 2025?

Round to the nearest cent (for example, if 54.238 then type 54.24)

Question

On April 1, 2019, Flamengo Co. signed a one-year, 8% interest-bearing note payable for $50,000. Assuming that Flamengo Co. maintains its books on a calendar year basis, how much interest expense should be reported in the 2020 income statement?

a.$1,000.

B.$2,000.

C.$4,000.

D.$3,000.

Which of the alternatives results from the accrual of interest:

A.Increase in liabilities and decrease in stockholders' equity.

B.Increase in assets and stockholders' equity.

C.Increase in assets and liabilities.

D.Increase in liabilities and increase in stockholders' equity.

Unfortunately, Flamengo Co. is involved in a lawsuit. When would the lawsuit be recorded as a liability on the balance sheet?

A.When the loss is probable and the amount can be reasonably estimated.

B.When the loss probability is reasonably possible and the amount can be reasonably estimated.

C.When the loss is probable regardless of whether the loss can be reasonably estimated.

D.When the loss probability is remote and the amount can be reasonably estimated.

Rice Corporation's attorney has provided the following summaries of three lawsuits against Rice:

• Lawsuit A: The loss is probable, but the loss cannot be reasonably estimated.

• Lawsuit B: The loss is remote and the loss cannot be reasonably estimated.

• Lawsuit C: The loss is reasonably possible and can be reasonably estimated.

Which of the following statements is correct?

A.A disclosure note is required only for lawsuit A.

B.A disclosure note is required only for lawsuits B & C.

C.A disclosure note is required only for lawsuits A & C.

D.A disclosure note is required for each of the three lawsuits.

On January 1, 2021, Flamengo Co. issued a four-year, $10,000, 7% bond. The interest is payable annually each December 31. The market interest rate is 8%. Flamengo uses the straight-line amortization method.

What is the total discount of this bond?