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QUESTION 13 The Kaplan Group sold $200,000 of 10-year bonds for $190,000. The face rate on the bonds was 8 % and interest is paid annually on December 31. What entry would be made on December 31 when the interest is paid? (Numbers are omitted.) Interest Expense 1. Bonds Payable Cash Interest Expense 2. Discount on Bonds Payable Cash Interest Expense Discount on Bonds Payable 3. Cash Interest Expense 4. Cash QUESTION 14 The statement of cash flows 1. along with the balance sheet and income statement is prepared on the accrual basis. 2. along with the balance sheet is used to analyze liquidity 3. along with the balance sheet and statement of retained earnings is dated as of a specific year end date. 4. ties the balance sheet to the statement of retained earnings QUESTION 15 Authorized stock represents the 1. number of previously issued shares that have been repurchased by the corporation. 2. number of shares that are currently held by stockholders. 3. maximum number of shares that can be issued for each class of stock. 4. number of shares that the corporation has sold. QUESTION 16 What types of accounts are Treasury Stock and Paid-in Capital from Treasury Stock Transactions? Paid-in Capital from Treasury Stock Transactions Treasury Stock 1. stockholders' equity stockholders' equity 2. retained earnings retained earnings 3. contra equity contra equity 4. contra equity stockholders' equity

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