Which of the following most likely would be classified as a current liability in ACME's financial statements? A)Mortgage payable as a single payment in 10 years B)Three-year notes payable C)Dividends payable D)Bonds payable in 5 years
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3)Which of the following most likely would be classified as a current liability in ACME's financial statements?
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- 9. Which of the following items would be excluded from current liabilities? Group of answer choices a. Normal accounts payable which had been assigned by the creditor to a finance company. b. Long-term debt callable within one year or less because the debtor violated a debt provision. c. A short-term debt which at the discretion of the entity can be rolled over at least twelve months after the balance sheet date. d. A long-term liability callable or due on demand by the creditor even though the creditor have given no indication that the debt will be called.Which of the following is a current liability? Bond payable due in two years for which there is an adequate sinking fund. Bond payable due in three years expected to be refinanced. Bond payable due in eleven months for which there is an appropriation of retained earnings. Bond payable due in eight months and refinanced on a long-term basis at the end of reporting period.(Classification) The following items are found in the financial statements.(a) Discount on bonds payable.(b) Interest expense (credit balance).(c) Unamortized bond issue costs.(d) Gain on repurchase of debt.(e) Mortgage payable (payable in equal amounts over next 3 years).(f) Debenture bonds payable (maturing in 5 years).(g) Notes payable (due in 4 years).(h) Premium on bonds payable.(i) Bonds payable (due in 3 years). InstructionsIndicate how each of these items should be classified in the financial statements.
- An investor purchased debt investments at amortized cost on January 1. Annual interest was received on December 31. The investor’s interest income for the year would be lower than the annual interest received if the debt instrument was purchased at: a discount. a premium. C. par. D. face value.12. When interest expense is calculated using the effective-interest amortization method, interest expense (assuming that interest is paid annually) always equals the a. actual amount of interest paid. b. book value of the bonds multiplied by the stated interest rate. c. book value of the bonds multiplied by the effective interest rate. d. maturity value of the bonds multiplied by the effective interest rate. 13. On July 1, 2002, TJR issued 2,000 of its 8 percent, $1,000 bonds for $1,752,000. The bonds were issued to yield 10 percent. The bonds are dated July 1, 2002, and mature on July 1, 2012. Interest is payable semiannually on January 1 and July 1. Using the effective-interest method, how much of the bond discount should be amortized for the six months ended December 31, 2002? a. $15,200 b. $12,400 c. $9,920 d. $7,600What is the correct answer? The semi-annual interest expense to be recorded using the straight line method of interest amortization on $46,000, ten-year, 6 percent bonds that are issued at 98 is a. $1,426 b. $1,380 c. $1,334 d. $2,852
- An accounting example: Otter Products inc issued bonds on January 1, 2019. Interest to be paid semi-annually. Term in years is 2; Face value of bonds issued is $200,000; Issue Price $206,000; Specified Interest Rate each payment period is 6% Question. Calculate a. the amount of interest paid in cash every payment period. b. The amount of amortization to be recorded at each interest payment date (use straight-line method) c. complete amoritzation table by calculating interest expense and beginning and ending bond carrying amounts at the each period over 2 years. The term is for 2 years however 3 years is showing on the workbook. How do I calcuate the 3rd year if the problem only says the term is 2 years?If the company issued RO 100,000 , 5% interest, 10-year bonds at 98 on January 1, 2021, which of the following is the correct accounting entry on the date of issuance? a. the company will record premium on bonds payable, RO 200 b. the company will record discount on bonds payable, RO 2,000 c. the company will record premium on bonds payable, RO 2,000 d. the company will record discount on bonds payable, RO 200The following items are found in the financial statements. a. Discount on bonds payable. b. Interest expense (credit balance). c. Unamortized bond issue costs. d. Gain on repurchase of debt. e. Mortgage payable (payable in equal amounts over next 3 years). f. Debenture bonds payable (maturing in 5 years). g. Notes payable (due in 4 years). h. Premium on bonds payable. i. Bonds payable (due in 3 years). Instructions Indicate how each of these items should be classified in the financial statements.
- The debt is amortized by equal payments made at the end of each payment interval. Compute (a) the size of the periodic payments; (b) the outstanding principal at the time indicated; (c) the interest paid by the payment following the time indicated for finding the outstanding principal; and (d) the principal repaid by the same payment as in part c. Debt Principal Interest Rate Conversion Period quarterly Outstanding Principal After: 8th payment $14,000.00 Repayment Period 7 years Payment Interval 1 month 9% (a) The size of the periodic payment is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)1. Which of the following modification of terms will not qualify for derecognition of financial liability? * a. A P1,000,000 bonds payable was due for payment on September 01, 2019. The maturity date has been extended up to September 01, 2020 with the face amount still the same. b. The market rate of interest associated with 2,500 bonds was 10% when these bonds were sold. Present value of the bonds was computed based on this percentage. Months later, prices in the market significantly changed making a shift from 10% to 11.5% effective rate. c. P375,000 of interest that accrued from the last date of interest payment up to the present time has been condoned or forgiven. The face amount though of P5,000,000 is unchanged and would be paid at the original date stated on the bond indentures. d. A previous P2,000,000 bonds was replaced by another bond payable of the same amount but with a different nominal rate of 9% instead of the old 11% rate.Refer to the information in RE13-5. Assume that on December 31, 2019, the investment in Smith Corporation bonds has a market value of 12,500. Prepare the year-end journal entry to record the unrealized gain or loss.