1) ABC Company issues a $100,000 bond on January 3 of the current year

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1) ABC Company issues a $100,000 bond on January 3 of the current year. The stated (contact) rate on the bond is 12%. At the date of issue, the market rate is 10%. As a result, the bond will be issued at:

		a premium
		a discount
		an additional paid-in capital
		par value
		a dividend

 

2) ABC Corp. issued $100,000 of bonds at a premium; as a result, the company:

A) received more than $100,000.

B) received less than $100,000.

C) received $100,000.

D) will pay the bondholders more money on the maturity date than it received on the issue date.

3) Allowance for Doubtful Accounts has an unadjusted balance of $400 at the end of the vear, and uncollectible accounts expense is estimated at 1% of net sales. If net sales are $300,000, compute the amount of the adjustment to record the provision for doubtful accounts.

a. $3.400

b. $2,600

c. $400

d. $3.000