Indicate How Each Event Affects the Elements of Financial Statements

question 60

Essay

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.Use only one letter for each element.You do not need to enter amounts.

-On December 31,2016,Tiller Co.paid cash for interest on bonds it had issued on January 1,2016 at 98,and amortized part of the discount on bonds.Crown Co.uses the effective interest method of amortizing bond discounts.Indicate the effects of the amortization of the discount only.

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Definitions:

Blank Indorsements

involves an endorsement on a financial instrument, like a check, that specifies no endorsee, making it payable to the bearer.

Indorser

An individual or entity that signs on the back of a negotiable instrument, thereby transferring ownership or guaranteeing payment to another party.

Beneficial Interest

The right to receive benefits on assets held by another party, such as income from a trust.

Holder In Due Course

A person who is a holder of a negotiable instrument who took the instrument for value, in good faith, without notice that it is overdue or has been dishonored or that there is any uncured default with respect to payment of another instrument issued as part of the same series, without notice that the instrument contains an unauthorized signature or has been altered, without notice of any claim of a property or possessory interest in it, and without notice that any party has any defense against it or claim in recoupment to it.