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- Flamingo Company borrows $30,000 using a five-year, long-term installment note payable. The rate on the note is 5 percent and Flamingo agrees to make monthly payments of $566.14. When Flamingo records its first payment on the note payable, what will the journal entry look like (without the numbers).

1. Debit Cash

Debit Interest Expense

Credit Notes Payable

2. Debit Interest Expense

Credit Notes Payable

Credit Cash

3. Debit Notes Payable

Credit Cash

Credit Interest Payable

4. Debit Interest Expense

Debit Notes Payable

Credit Cash

- Relish Company incurs the following costs associated with the purchase of a new machine:

Purchase Price $20,000

Sales Tax 1,500

Manufacturer testing to ensure proper functioning 500

Shipping costs for the machine paid by Relish Company 200

What is the total cost Relish will capitalize when recording the asset?

1. $20,500

2. $22,200

3. $20,000

4. $22,000

- On January 1, 2017, Jenks Company purchased the copyright to Jackson Computer tutorials for $216,000. It is estimated that the copyright will have a useful life of 5 years and no salvage value. Assuming Jenks has a year-end of December 31, the amount of Amortization Expense recognized for year 2017 should be:

1. $20,000

2. $21,600

3. $43,200

4. $40,000

- On November 6, 2019, Julio paid $650 cash for his airplane ticket home for Christmas break. He leaves Bozeman on December 16, 2019. How would the airline record the transaction where they receive cash from Julio?

1. Debit Cash 650

Credit Deferred Ticket Revenue 650

2. Debit Deferred Ticket Revenue 650

Credit Cash 650

3. Debit Ticket Revenue 650

Credit Deferred Ticket Revenue 650

4. Debit Cash 650

Credit Ticket Revenue 650

- Which of the following expenditures should be expensed (debited to an expense account)?

1. The replacement of an engine on an airplane.

2. An oil change for a delivery vehicle.

3. The addition of a garage to a home.

4. A refrigeration system added to a tractor-trailer.

- Goodwill is:

1. The value of a business as a whole, over and above the value of its net identifiable assets.

2. Recorded when created internally through advertising expenses.

3. Only recorded by the seller of a business.

4. Amortized over the greater of its estimated life or forty years.

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