Exam 14: Long-Term Liabilities

Refer to the following list of liability balances at December 31,2018. Accounts Payable \ 22,000 Employee Health Insurance Payable 1450 Employee Income Tax Payable 400 Estimated Warranty Payable (Due 2019) 1200 Long-Term Notes Payable (Due 2022) 37,000 FICA-OASDI Taxes Payable 1560 Sales Tax Payable 1270 Mortgage Payable (Due 2023) 7000 Bonds Payable (Due 2024) 53,000 Current Portion of Long-Term Notes Payable 7500 What is the total amount of current liabilities?

Debentures are bonds that mature in installments at regular intervals.

Adventure Travel signed a 14%,10-year note for $152,000.The company paid an installment of $2200 for the first month.After the first payment,what is the principal balance? (Do not round any intermediate calculations,and round your final answer to the nearest dollar.)

When bonds are issued at face value,________.

The Technology Company issues $517,000 of 11%,10-year bonds at 104 on March 31,2018.The bonds pay interest on March 31 and September 30.Assume that the company uses the straight-line method for amortization.Calculate the net balance that will be reported for the bonds on the September 30,2018 balance sheet.(Round your intermediate answers to the nearest dollar.)

Installment payments for mortgages generally contain both an amount for principal repayment and an amount for interest.

On January 1,2018,Belden,Inc.issued long-term notes payable for $50,000.The note will be paid over 10 years with payments of $5,000 plus 12% interest due each January 1,beginning January 1,2019.Prepare the amortization schedule for the first three payments.

The amortization of bond premium increases interest expense over the life of the bonds.

Generally accepted accounting principles require that interest expense be measured using the straight-line amortization method.

On January 1,2018,Sullivan Company purchases $300,000 of property by paying $50,000 in cash and signing a 10-year mortgage note at 13% for the balance.Sullivan will make yearly payments of $46,072.Prepare the amortization schedule for the first five payments.(Round your answers to the nearest dollar.)

On July 1,2018,Jordie Equipment Dealer issued $600,000 of 9% bonds payable that mature in seven years.These bonds were issued at face value and pay interest each June 30 and December 31.Each semiannual interest payment is $27,000.

When bonds are retired at maturity ________.

If a bond's stated interest rate is lower than the market rate,which of the following is TRUE?

The process for calculating present values is often called present valuing cash flows.

The discount on bonds payable becomes interest expense through a process of depreciation.

Landings Glassware Company issues $1,150,000 of 15%,10-year bonds at 95 on February 28,2019.The bonds pay interest on February 28 and August 31.The journal entry to record the issuance includes a ________.

The difference between mortgages payable and notes payable is that notes payable are always secured by specific assets.

The balance in the Bonds Payable account is a credit of $67,000.The balance in the Discount on Bonds Payable account is a debit of $2,650.The bond's carrying amount is $64,350.

The balance in the Bonds Payable account is a credit of $92,000.The balance in the Premium on Bonds Payable account is a credit of $1,990.The bond's carrying amount is $93,990.

The current portion of notes payable is the principal amount that will be paid within two years of the balance sheet date,and the remaining portion is long term.