Exam 10: Reporting and Analyzing Liabilities

The relationship between current assets and current liabilities is

Interest expense on a note payable, with interest due at maturity, is

Use the following information for questions On October 1, 2012, Carla's Carpet Service Limited borrows $80,000 from Regional Bank by signing a 3-month, $80,000, 4% bank loan. Interest is due the first of each month. -What adjusting entry is required at December 31, 2012?

With blended principal and interest payments, the equal periodic payments result in the principal portion increasing each period.

Provisions are liabilities of uncertain timing or amount, along with some uncertainty as to whether the liability will have to be paid.

The interest expense recorded on an interest payment date is increased

On January 1, 2012, Ganson Limited, a calendar-year company, issued $160,000 of notes payable, of which $40,000 is due on January 1 for each of the next four years. The proper statement of financial position presentation on December 31, 2012, is

When bonds are issued at a premium, the total interest cost of the bonds over the life of the bonds is equal to the amount of the

A $500,000 bond was retired at 97 when the carrying amount of the bond was $495,000. The entry to record the retirement would include a

Even though current and non-current debt must be shown separately on the statement of financial position, it is not necessary to prepare a journal entry to recognize this.

Tinhua Corporation issues 5,000, 10-year, 6%, $1,000 face value bonds dated January 1, 2013 at 95. The journal entry to record the issue of the bonds will include a

The face value of a bond is the amount of principal and interest due at the maturity date.

All long-term notes payable must be secured.

To the nearest dollar, what is the issue price of the bonds?

Notes payable usually require the borrower to pay interest.