On December 31, 2013, Excello Electric Company had $1 million of short-term notes payable due February 7,

Question:

On December 31, 2013, Excello Electric Company had $1 million of short-term notes payable due February 7, 2014. Excello expected to refinance these notes on a long-term basis. On January 15, 2014, the company issued bonds with a face value of $900,000 at 98; brokerage fees and other costs of issuance were $3,450. On January 22, 2014, the proceeds from the bond issue plus additional cash held by Excello on December 31, 2013, were used to liquidate the $1 million of short-term notes. The December 31, 2013, balance sheet is issued on February 12, 2014.

Required:

Prepare a partial balance sheet as of December 31, 2013, showing how the $1 million of short-term notes payable should be disclosed. Include an appropriate footnote for proper disclosure.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...