1. On November 15, 2010, Betty Corporation accepted a note receivable in place of an outstanding accounts receivable in the amount of $138,460. The note is due in 90 days and has an interest rate of 7.5%. What is the appropriate journal entry to record at maturity?
A) Cash 138,460.00
Notes Receivable 138,460.00
B) Notes Receivable 138,460.00
Accounts receivable 138,460.00
Notes Receivable 138,460.00
C) Interest Revenue 2,596.00
Cash 141,056.13
Cash 138,460.00
D) Interest receivable 1,298.06
Notes receivable 139,758.06
Cash 141,056.13
E) Interest Revenue
Interest Receivable
Notes Receivable 138,460.00
2. On September 1, 2010, Drill Far Company purchased a tract of land for $2,300,000. The land is estimated to have a salvage value or $50,000, a useful life of four years, and contain an estimated 4,234,000 tons of iron ore. The company also purchased equipment to use in the extraction process that cost $220,450. The company plans to abandon the equipment when the ore is completely mined. During 2010, the company extracted and sold 1.25 million tons of ore. What is the depletion expense recorded for 2010?
A) $575,000
B) $679,027
C) $775,000
D) $562,500
E) $600,000