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Question 1 On July 1, 200X you enter into a note payable of $200,000 with a 5% annual interest rate

Question 1

On July 1, 200X you enter into a note payable of $200,000 with a 5% annual interest rate. Your interest expense for 200X will be:

$10,000.

$2,500

$2,000

$5,000

Question 2

Post Company issues a 6 year, 6%, $200,000 bond at par on July 31. The journal entry would be:

A debit to cash of $200,000 and a credit to bonds payable of $200,000.

A debit to bonds payable of $200,000 and a credit to cash of $200,000.

A debit to cash of $200,000 and a credit to bonds receivable of $200,000.

A debit to bonds receivable of $200,000 and a credit to cash of $200,000.

Question 3

Post Company issues a 6 year, 6%, $200,000 bond at par on July 31. How much interest will be paid over the life of the bond?

$4,000

$6,000

$12,000

$72,000

Question 4

A company has current assets of $500,000, net income of $10,000, current liabilities of 250,000 and equity of $250,000. What is the current ratio?

0.5

7.5

0.3

2.0

Question 5

If a company has gross salaries of $12,000 and it withholds $1,800 for income taxes and $800 for FICA taxes, the journal entry to record the employee s pay should include:

Debit to salary expense for $9,400

Debit to salary payable for $9,400

Credit to salary payable for $9,400

Credit to cash for $12,000

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