On July 1, 2021, Hale Kennels sells equipment for $220,000. The equipment originally cost $600,000, had an estimated 5-year life, and an expected salvage value of $100,000. The accumulated depreciation account had a balance of $350,000 on January 1, 2021, using the straight-line method. The gain or loss on disposal is
A. $30,000 gain.
B. $20,000 loss.
C. $20,000 gain.
D. $30,000 loss.
Question 36
The cost of successfully defending a patent in an infringement suit should be
A. charged to Legal Expenses.
B. deducted from the book value of the patent.
C. recognized as a loss in the current period.
D. added to the cost of the patent.
Question 37
The current carrying value of a bond is $563,320 and the face value is $254,666. The effective interest rate is 5% while the contractual rate of interest is 18% with interest payments semiannually on July 1 and January 1. Rounding to the nearest dollar, what is the amount of bond interest expense to be recorded on July 1?
Question 38
As of today, the carrying value of a bond was $228,284 and the face value of the bond was $756,223. The effective interest rate was 14% while the contractual rate of interest was 6% with interest payments semiannually on June 30 and December 31. Rounding to the nearest dollar, what is the interest payment made to the bondholder on June 30?
