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Chapter 14: Q15BE (page 754)

On December 31, 2017, Hyasaki Corporation has the following account balance:

Bonds payable, due January 1, 2026 \(2,000,000

Discount on bonds payable \) 88,000

Interest payable $ 80,000

Show how the above accounts should be presented on the December 31, 2017, balance sheet, including the proper classifications.

Short Answer

Expert verified

The amount of current liabilities is $1,912,000.

Step by step solution

01

Meaning of Balance Sheet

The balance sheet is afinancial statement that contains details of a company’s assets or liabilities at a specific point in time. It shows how the business is being funded. In the balance sheet, theassets and liabilities should be equal.

02

Balance Sheet (Partial)

Presented below is the balance sheet partial on December 31, 2017:

Hyasaki Corporation

Balance Sheet (Partial)

December 31, 2017


Current Liabilities:

Interest Payable

$80,000

Long-term liabilities:

Bonds Payable

$2,000,000

Less: Discount on bonds payable

$88,000

$1,912,000

Working notes:

Current liabilities (Interest payable) = $ 80,000 (Given)

Long-term liabilities (Bonds payable) = $2,000,000 (Given)

Discount on bonds payable = $88,000 (Given)

Total = (Bonds Payable – Discount on bonds payable)

= ($2,000,000 - $88,000)

= $1,912,000

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Most popular questions from this chapter

What is done to record properly a transaction involving the issuance of a non-interest -bearing long-term note in exchange for property?

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