Your client, EKB, Inc., prepared the following schedule for long-term debt for the audit of financial statements for the year ended December 31, 2019: 

Required:

a. What type of evidence would you examine to support the beginning balances in the accounts? 

b. What types of evidence would you use to support the additions to each account? 

c. What types of evidence would you examine to support payments? 

d. What procedures would you perform related to the ending balances in the accounts? 

e. What evidence would you use to verify interest rates and due dates? 

f. How might you use the information presented above to audit interest expense and interest payable accounts?

Transcribed Image Text:

I//19 Beginning Balance 12/31/19 Interest Due Ending Balance Notes Payable Description Mortgage Payable Unsecured Notes Payable Rate Date Additions Payments 6.25% 2025 $1,125,000 $ 200,000 $ 925,000 6.00% 2027 7,500,000 475,000 7,025,000 Secured Bonds 5.75% 2023 2,700,000 $ 1,250,000 300,000 3,650,000 Convertible Debentures 5.25% 2030 10,000,000 10,000,000 Total $11,325,000 $11,250,000 $975,000 $21,600,000