HORNGREN'S FINANCIAL & MANGERIAL ACCOUNT
7th Edition
ISBN: 9780136505273
Author: MILLER-NOBLES
Publisher: PEARSON
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Chapter 11, Problem 3QC
To determine
Long-term notes payable: Long-term notes payable represent a legal and written promise made by the business to pay a debt with interest over a period of more than a year. It is reported under the long-term liability section of the balance sheet.
Current portion of long-term notes payable: The principal amount of notes payable which would be paid within one year is called as current portion of long-term notes payable. The current portion of long-term notes payable is reported as a current liability.
To identify: The true statement.
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Jade Larson Antiques owes $20,000 on a truck purchased for use in the business. Assume the company makes timely principal payments of $5,000 each year at December 31 plus interest at 8%. Which of the following is true?
a. After the first payment is made, the company owes $15,000 plus three years’ interest.
b. After the first payment, $15,000 would be shown as a long-term liability.
c. After the first payment is made, $5,000 would be shown as the current portion due on the long-term note.
d. Just before the last payment is made, $5,000 will appear as a long-term liability on the balance sheet.
Jade Larson Antiques owes $20,000 on a truck purchased for use in the business. Assume the company makes timely principal payments of $5,000 each year at December 31 plus interest at 8%. Which of the following is true?
After the first payment is made, the company owes $15,000 plus three years’ interest.
After the first payment, $15,000 would be shown as a long-term liability.
After the first payment is made, $5,000 would be shown as the current portion due on the long-term note.
Just before the last payment is made, $5,000 will appear as a long-term liability on the balance sheet.
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Jade Larson Antiques owes $20,000 on a truck purchased for use in the business. Assume the company makes
timely principal payments of $5,000 each year at December 31 plus interest at 8%. Which of the following is true?
O A. Just before the last payment is made, $5,000 will appear as a long-term liability on the balance sheet.
OB. After the first payment is made, $5,000 would be shown as the current portion due on the long-term note.
OC. After the first payment is made, the company owes $15,000 plus three years' interest.
O D. After the first payment, $15,000 would be shown as a long-term liability.
Chapter 11 Solutions
HORNGREN'S FINANCIAL & MANGERIAL ACCOUNT
Ch. 11 - On January 1, 2016, a business borrowed 18,000 on...Ch. 11 - A company sells 180,000 (selling price) of goods...Ch. 11 - Prob. 3QCCh. 11 - Prob. 4QCCh. 11 - Prob. 5QCCh. 11 - Prob. 7QCCh. 11 - Vega Company expects to pay a 4% bonus on net...Ch. 11 - Prob. 9QCCh. 11 - Prob. 10QCCh. 11 - Prob. 1RQ
Ch. 11 - What is a current liability? Provide some examples...Ch. 11 - How is sales tax recorded? Is it considered an...Ch. 11 - How do unearned revenues arise?Ch. 11 - What do short-term notes payable represent?Ch. 11 - Coltrane Company has a 5,000 note payable that is...Ch. 11 - Prob. 7RQCh. 11 - Prob. 8RQCh. 11 - Prob. 9RQCh. 11 - Prob. 10RQCh. 11 - What are the two main controls for payroll?...Ch. 11 - When do businesses record warranty expense, and...Ch. 11 - Prob. 13RQCh. 11 - Prob. 14RQCh. 11 - Prob. 15RQ
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