Business and Finance Homework

On September 1, 2010, Donna Equipment signed a one-year, 10%interest-bearing note payable for $52,000. Assuming that DonnaEquipment maintains its books on a calendar year basis, how muchinterest expense that should be reported in the 2011 incomestatement? (Do not round intermediate calculations.)
$1,733
$3,467
$5,200
$3,900

Short Company purchased land by paying $29,000 cash on the purchasedate and agreeing to pay $29,000 for each of the next eight yearsbeginning one-year from the purchase date. Short’s incrementalborrowing rate is 9%. At what amount would the land be reported aton the balance sheet? (Use Table 2) (Round “PV Factor” to 4 decimalplaces.)

$232,000
$116,433
$261,000
$189,509

Rudy Corporation is looking to purchase a building costing $460,000by paying $80,000 cash on the purchase date, and agreeing to makeannual payments for the next eight years; the first payment is dueone year after the purchase date. Rudy’s incremental borrowing rateis 8%. How much will each of the annual payments be? (Use Table 2)(Round “PV Factor” to 4 decimal places and final answer to nearestdollar amount.)

$80,047
$47,500
$56,126
$66,126

What is the correct entry for the sale of 2,900 shares of $25 parvalue preferred stock for $188,500 cash?

A Cash 188,500
Preferred stock 188,500

B Cash 72,500
Preferred stock 72,500

C Cash 188,500
Gain on sale of preferred stock 116,000
Preferred stock 72,500

D Cash 188,500
Preferred stock 72,500
Capital in excess of par, preferred stock 116,000
Option A
Option C
Option B
Option D