On January 1 of Year 1, Boing Airlines issued $3,500,000 of 7%, bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $3,197,389 and the market rate of interest for similar bonds is 8%. The bond premium or discount is being amortized using the straight-line method at a rate of $10,087 every six months. The life of these bonds is:

On September 12, Wander Company sold merchandise in the amount of $5,800 to Jetson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Wander uses the periodic inventory system and the gross method of accounting for sales. On September 14, Jetson returns some of the merchandise. The selling price of the merchandise is $500 and the cost of the merchandise returned is $350. Jetson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Wander makes on September 18 is:

Bulldog Enterprises establishes a $250 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $73 for Office Supplies, $137 for merchandise inventory, and $22 for miscellaneous expenses. The fund has a balance of $18. On October 1, the accountant determines that the fund should be increased by $50. The journal entry to record the increase in the fund balance on October 1 is:

On May 31, the Cash account of Boats Unlimited had a normal balance of $5,000. During May, the account was debited for a total of $12,200 and credited for a total of $11,500. What was the balance in the Cash account at the beginning of May?

Nicole Company collected $1,750 as payment for the amount owed by a customer from services provided the prior month on credit. How does this transaction affect the accounting equation for Nicole?

Clayton makes a $25,000, 90-day, 7% cash loan to Citrus Co. Clayton’s entry to record the collection of the note and interest at maturity should be: (Use 360 days a year.)

On April 1, Penthouse Publishing Company received $1,548 from Albuquerque, Inc. for 36-month subscriptions to several different magazines. The company credited Unearned Fees for the amount received and the subscriptions started immediately. Assuming adjustments are only made at year-end, What is the adjusting entry that should be recorded by Penthouse Publishing Company on December 31 of the second year?

If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation?

The accrual basis of accounting recognizes expenses when cash is paid.

McLean Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $87,000. The machine’s useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 84,500 units of product. Determine the machines’ second year depreciation under the double-declining-balance method.