Author Question: Which of the following accounts is NOT used to account for merchandise sales transactions? a. Sales ... (Read 116 times)

cagreen833 · **on:** Jul 5, 2018

Which of the following accounts is NOT used to account for merchandise sales transactions?
a. Sales
b. Sales Tax Payable
c. Sales Returns and Allowances
d. Accounts Payable

Question 2

100,000 of 9, 10-year bonds were issued for 106,710 when the market rate of interest was 8. The bonds pay interest once a year.

1. How much interest will be paid in cash in the first year?
2. How much interest expense will be reported for the first year, assuming the company uses effective-interest amortization?
3. How much interest expense will be reported for the first year, assuming the company uses straight-line amortization?

sylvia · **Reply #1 on:** Jul 5, 2018

Answer to Question 1

d

Answer to Question 2

1. 9,000 = 100,000 x 0.09
2. 8,536.80 = 106,710 x 0.08
3. 8,329 = 9,000 - (6,710 premium / 10 years)