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Chapter 12: Q11SE (page 657)

Preparing the liabilities section of the balance sheet

Luxury Suites Hotels includes the following selected accounts in its general ledger at

December 31, 2018:

Notes Payable (long-term) \( 200,000 Accounts Payable \) 33,000

Bonds Payable (due 2022) 450,000 Discount on Bonds Payable 13,500

Interest Payable (due next year) 1,000 Salaries Payable 2,600

Estimated Warranty Payable 1,300 Sales Tax Payable 400

Prepare the liabilities section of Luxury Suites’s balance sheet at December 31, 2018.

Short Answer

Expert verified

The total of the liabilities side of the balance sheet is $474,800.

Step by step solution

01

Definition of the interest payable

Interest payable is the interest that is due but not paid.

02

Liabilities side of balance sheet

Luxury Suites
Balance Sheet
as of December 31, 2018

Current Liabilities:

Accounts Payable

$33,000

Interest Payable

$1,000

Salaries Payable

$2,600

Sales Tax Payable

$400

Estimated Warranty Payable

$1,300

Total Current Liabilities

$38,300

Long-term Liabilities:

Notes Payable

$200,000

Bonds Payable

$450,000

Less: Discount on Bonds Payable

($13,500)

Total Long-Term Liabilities

$436,500

Total Liabilities

$474,800

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December 31

2018 2019 2020

Current Liabilities:

Bonds Payable \) \( \)

Interest Payable

Long-term Liabilities:

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