Financial Statement Presentation of Bond Accounts - Indicate the proper financial statement classification for each of the following accounts:
Gain on Bond retirement (material amount)
Discount on Long-term Bonds Payable
Mortgage Notes Payable
Long-term Bonds Payable
Bond Interest Expense
Bond Interest Payable
Premium on Long-term Bonds Payable
Financial Statement Presentation of Bond Accounts - Indicate the proper financial statement classification for each of the following accounts:
Gain on Bond retirement (material amount)
Discount on Long-term Bonds Payable
Mortgage Notes Payable
Long-term Bonds Payable
Bond Interest Expense
Bond Interest Payable
Premium on Long-term Bonds Payable
Related questions
Fridley Manufacturing's accounting records reveal the following account balances after adjusting entries are made on December 31, 2018:
| Accounts payable | $ 62,500 | |
| Bonds payable (9.4%, due in 2025) | 800,000 | |
| Lease liability* | 41,500 | |
| Bonds payable (8.7%, due in 2021) | 50,000 | |
| Deferred tax liability* | 133,400 | |
| Discount on bonds payable (9.4%, due in 2025) | 12,600 | |
| Income tax payable | 26,900 | |
| Interest payable | 38,700 | |
| Installment note payable (8% equal installments due 2019 to 2022) | 120,000 | |
| Notes payable (7.8%, due in 2023) | 400,000 | |
| Premium on notes payable (7.8%, due in 2023) | 6,100 | |
| Zero coupon note payable, $50,000 face amount, due in 2024 (net of discount) | 31,900 |
* Long-term liability
Required:
Prepare the current liabilities and long-term debt portions of Fridley's statement of financial position at December 31, 2018. Provide a separate line item for each issue (do not combine separate bonds or notes payable), but some items may need to be split into more than one item.
| Fridley Manufacturing | ||
| Liabilities Section of the Statement of Financial Position | ||
| December 31, 2018 | ||
| Liabilities | ||
| Current liabilities: | ||
| Accounts payable | $ | |
| Interest payable | ||
| Income tax payable | ||
| Current portion of installment note | ||
| Total current liabilities | $ | |
| Long-term liabilities: | ||
| Bonds payable: | ||
| Bonds payable (8.7%, due in 2021) | ||
| Bonds payable (9.4%, due in 2025) | $ | |
| Less: Discount on bonds payable | ||
| Notes payable: | ||
| Notes payable (7.8%, due in 2023) | $ | |
| Add: Premium on notes payable | ||
| Installment note payable (8%) | ||
| Note payable (4%, due in 2024) | $ | |
| Less: Discount on note payable | ||
| Other long-term liabilities: | ||
| Lease liability | ||
| Deferred tax liability | ||
| Total liabilities | $ | |
Reporting Issuance and Retirement of Long-Term Debt
On the basis of the details of the following bonds payable andrelated discount accounts, indicate the items to be reported in theFinancing Activities section of the statement of cash flows,assuming no gain or loss on retiring the bonds:
| ACCOUNTBonds Payable | ACCOUNTNO. | |||||||||||
| Balance | ||||||||||||
| Date | Item | Debit | Credit | Debit | Credit | |||||||
| 2016 | ||||||||||||
| Jan. | 1 | Balance | 300,000 | |||||||||
| Jan. | 2 | Retire bonds | 60,000 | 240,000 | ||||||||
| June | 30 | Issue bonds | 180,000 | 420,000 | ||||||||
| ACCOUNTDiscount on Bond Payable | ACCOUNTNO. | |||||||||||
| Balance | ||||||||||||
| Date | Item | Debit | Credit | Debit | Credit | |||||||
| 2016 | ||||||||||||
| Jan. | 1 | Balance | 13,500 | |||||||||
| Jan. | 2 | Retire bonds | 4,800 | 8,700 | ||||||||
| June | 30 | Issue bonds | 12,100 | 20,800 | ||||||||
| Dec. | 31 | Amortize discount | 1,040 | 19,760 | ||||||||
| Item | Section of Statement of Cash Flows | Added or Deducted | Amount |
| Retire bonds | $ | ||
| Issue bonds | $ | ||
| Amortization of discount | $ |
