Liabilities: Liabilities are debt and obligations of a business. These are the claims against the resources that a business owes to outsiders of the company. Liabilities may be short-term or long-term depending upon the time duration in which it is paid back to the creditors.
To report: Liabilities on the classified balance sheet.
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Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
- Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market rate of 4%. The bonds paid interest semi-annually on June 30 and Dec. 31. How much money did the company receive when the bonds were issued? The bonds would be quoted at what rate?arrow_forwardWhirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the market of interest was 9%. The company uses the effective-interest method of amortization. At the end of the year, the company will record ________. A. a credit to cash for $28,733 B. a debit to interest expense for $31,267 C. a debit to Discount on Bonds Payable for $1,267 D. a debit to Premium on Bonds Payable for $1.267arrow_forwardDiana Inc. issued $100,000 of its 9%, 5-year bonds for $96,149 when the market rate was 10%. The bonds pay interest semi-annually. Prepare an amortization table for the first three payments.arrow_forward
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- On January 1, 2021, the company issued $1,800,000, 6% bonds with a 10-year maturity. The bonds were issued to investors that require an effective interest rate of 9%. The accountant did NOT record the issuance of these bonds. Interest is paid annually and the accountant did NOT record the interest payment transaction. The effective interest method is used to amortize any premium or discount. NOTE – round calculations to nearest dollar. In the Excel spreadsheet, see the tab labelled “Bonds Payable – Series 2” to make any calculations, including an amortization schedule, to support journal entries.arrow_forwardSheridan Industries, Inc. issued $17,400,000 of 8% debertures on May 1, 2024 and received cash totaling $15,438,373. The bonds pay interest semiannually on May 1 and November 1. The maturity date on these bonds is November 1, 2028. The firm uses the effective- interest method of amortizing discounts and premiums. The bonds were sold to yield an effective rate of 10%. Calculate the total dollar amount of discount or premium amortization during the first year (5/1/24 through 4/30/25) these bonds were outstanding. (Round answers to O decimal places, e.g. 5,275.) Date 5/1/24 11/1/24 5/1/25 Total $ Cash Interest Interest Expense tA $ $ Discount Amortized $ Carrying Value of Bonarrow_forwardVishalarrow_forward
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