Financing Liabilities Directed Reading Gulde LO1. Notes Payable a) Companies report short-term notes payable on the balance sheet as because they are due and payable within 1 year from the balance sheet date or operating cycle, whichever is longer. b) ABC Company borrows $1,000 on October 1 of the current year to pay trade accounts payable. The 6-month, 10% note and Interest are due the following year on March 31. What is the amount of accrued Interest payable on December 31 of the current year? c) To journalize for the borrowing of a long-term notes payable, the debit journal entry would be to and the credit entry would be to LO2. Overview of Bonds Payable Briefly describe a bond payable. b) The contract between a corporation and the bondholders (represented by a trustee) protects the rights of multiple creditors by outlining the debt covenants, enforcement, and the type and terms of the bond. c) Name at least three types of bonds. 1) 11) 1) d) Bonds issued at a(n). are issued at a price below face value. Bonds issued at a(n) are issued at a price above face value. LO3. Accounting for the Initial and Subsequent Measurement of Bonds Payable a) b) If a bond is issued at par, the debit is to The and the credit is to computes interest expense by multiplying the historical market interest rate by the beginning balance of the debt. c) stated rate, is zero. are bonds that do not pay cash interest because the coupon rate, or LO4. Bonds Issued between Interest Dates a) ABC Company issues $100,000 par value 5 year, 4% bonds with interest payable June 30 and December 31. If the bonds were sold on November 1, in between interest dates, what is the amount of