Debit Credit Date ccounts and Explanation 4. How is the retirement of bonds payable accounted for? a) When a bonds payable is retired at maturity, the journal entry is a debit to and a credit to 5 How are liabilities reported on the balance sheet? a) Identify if the liability would be classified as a current liability (CL) or a long-term liability (LTL) on the balance sheet. i)Bonds Payablett i) Accounts Payable cL iii) Mortgage Payable ITL iv) Accounts Payable c v) FICA taxes 6. How do we use the debt to equity ratio to evaluate performance? a) What is the formula for debt to equity ratio? b) If total current liabilities are $10,000, long-term liabilities are S20,000, and total equity in the business is $40,000, what is the debt to equity ratio