On March 1, 2015, Vinnie Services Issued a 5% Long-Term

question 84

Multiple Choice

On March 1, 2015, Vinnie Services issued a 5% long-term notes payable for $15,000. It is payable over a 3-year term in $5,000 annual principal payments on March 1 of each year plus interest, beginning March 1, 2016. Each yearly installment will include both principal repayment of $5,000 and interest payment for the preceding one-year period. On March 1, 2016:

• A)Vinnie must accrue $5,000 of Interest Expense.
• B)Vinnie must accrue for the coming $5,000 as current portion of principal payment.
• C)Vinnie must pay out $750 of Interest Expense to the note holder.
• D)Vinnie will receive $5,000 as an installment payment.

---

Definitions:

Direct Materials

Raw materials that are directly used in the production of a product and can be easily traced to it.

Schedule of Cost

A detailed list showing the total costs involved in a specific project or for a specific period, categorized by type.

Goods Manufactured

The total value of all finished goods that were produced in a given period by a company.

Manufacturing Statement

A financial report detailing the costs involved in manufacturing activities, including direct materials, direct labor, and manufacturing overhead, within a specific period.