QUESTION $13$

In January $1,2022,$ Forbes Company purchased equipment with a $$66,550,3-$year, non$-$interest bearing note payable.

he appropriate discount rate is $10\%$ for note rith similar risk. Which of the following statement is true:

A$.$ The company should report $$6,655$ interest expense for $2022$ by applying the $10\%$ interest rate to the face value of $$66,550.$

B$.$ The company should record the cost of the equipment as $$50,000.$

C$.$ The company should record the cost of the equipment as $$66,550.$

D$.$ The company should report $$0$ interest expense for $2022$ because this is a non$-$interest bearing note payable.

QUESTION $14$

ABC Inc. has a patent on new swim training equipment. The patent was purchased from XYZ Inc. on January $1,$ Year $1$ for $$150,000.$ It is estimated that the

patent will have an economic useful life to the company of $5$ years, but has a remaining legal life of $7$ years. At the beginning of Year $3,$ ABC Inc.

successfully defended the patent with a total legal fee of $$12,000,$ which made the firm to extend the useful life by two additional years. How much is the

amortization expense for the patent in Year $3$:

A$.$ $$20,400$

B$.$ $$0$

C$.$ $$12,000$

D$.$ $$30,000$

QUESTION $15$