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6. Which of the following is true about accounts payable? 1. Accounts payable are also called trade accounts payable 2. When accounts payable are recorded at the net amount, a Purchase Discounts account will be used. 3. When accounts payable are recorded at the gross amount, a Purchase Discounts Lost account will be used. A) 1 в) 2 C) 3 D) Both 2 and 3 are true. 7. Which of the following is an example of a contingent liability? A) Obligations related to product warranties. B) Possible receipt from a litigation settlement. C) Pending court case with a probable favorable outcome. D) Tax loss carryforwards. Use the following to answer question 8 On October 1, 2017 Macklin Corporation issued 5 %, 10-year bonds with a face value of $6,000,000 at 104. Interest is paid on October 1 and April 1, with any premiums or discounts amortized on a straight-line basis. 8. The entry to record the issuance of the bonds would include a credit of A) $150,000 to Interest Payable. B) $240,000 to Discount on Bonds Payable. C) $5,760,000 to Bonds Payable. D) $240,000 to Premium on Bonds Payable.
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