Answered: 1) On December 31, 2016, Largo Company…

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 8E

See similar textbooks

Related questions

Concept explainers

Question

1) On December 31, 2016, Largo Company had a P750,000 note payable outstanding due July 31,2017. The entity planned to refinance the note by issuing long-term bonds.

Because the entity temporarily had excess cash, it prepaid P250,000 of the note on January 15, 2017.

In February 2017, the entity completed a P1,500,000 bond offering. The entity will use the bond offering proceeds to repay the note payable at maturity.

On March 31, 2017, the 2016 financial statements were authorized for issue.What amount of the note payable should be included in current liabilities on December 31, 2016?

a. 750,000

b. 500,000

c. 250,000

d. 0

2) Dean company has a P2,000,000 note payable due June 30, 2017. On December 31, 2015, the entity signed an agreement to borrow up to P2,000,000 to refinance the note payable on a long-term basis.

The financing agreement called for borrowing not to exceed 80% of the collateral the entity was providing.

On December 31, 2016, the value of the collateral was P1,500,000.

On December 31, 2016, what amount of the note payable should be reported as current liability?

a. 2,000,000

b. 1,500,000

c. 800,000

d. 500,000

3)Gar Company reported the following liability account balances on December 31, 2018:

Accounts payable 1,900,000

Bonds payable 3,400,000

Discount on bonds payable 200,000

Deferred tax liability 400,000

Dividends payable 500,000

Income tax payable 900,000

Note payable, due January 31, 2020 600,000

On December 31, 2019, what total amount should be reported as current liabilities?

a. 7,100,000

b. 4,300,000

c. 3,900,000

d. 4,100,000

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.