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Chapter 14: Q21Q (page 753)

What disclosures are required relative to long-term debt and sinking fund requirements?

Short Answer

Expert verified

Futurepaymentsforsinkingfund requirements and the maturity amounts of long-term debt.

Step by step solution

01

Meaning of Disclosures

Making realities or information public is the method of disclosure. Making fundamental information known to buyers, speculators, and everyone else included within the company's movement is what is implied by legitimate disclosure for organizations.

02

Explaining the disclosures are required relative to long-term debt and sinking fund requirements

The following are the two disclosures required for long-term debt and sinking funds:

  • One of the necessary disclosures must be provided at the balance sheet date to account for future sinking fund contributions.
  • Long-term debt maturities must be notified every five years.

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Most popular questions from this chapter

Question: What is the required method of amortizing discount and premium on bonds payable? Explain the procedures.

What are some forms of off-balance-sheet financing?

Celine Dion company issued $600,000 of 10%, 20- year bonds on January 1, 2017, at 102. Interest is payable semiannually on July 1 and January 1. Dion company uses the straight-line method of amortization for bond premium or discount.

Instructions:

Prepare the journal entries to record the following.

  1. The issuance of the bonds.
  2. The payment of interest and the related amortization on July 1, 2017.
  3. The accrual of interest and the related amortization on December 31, 2017.

Question: What are the general rules for measuring and recognizing gain or loss by both the debtor and the creditor in a troubled-debt restructuring involving a modification of terms?

Gottlieb Co. owes \(199,800 to Ceballos Inc. The debt is a 10-year, 11% note. Because Gottlieb Co. is in financial trouble, Ceballos Inc. agrees to accept some land and cancel the entire debt. The property has a book value of \)90,000 and a fair value of $140,000.

Instructions

  1. Prepare the journal entry on Gottlieb’s books for debt restructure.
  2. Prepare the journal entry on Ceballos’s books for debt restructure
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