Question
George's Hamburgers issued 8%,10-year bonds payable at95 on December 31,2018. At December 31,2020,George reported the bonds payable as follows: Long-term Liabilities: Bonds Payable $700,000 Less:
George's Hamburgers issued 8%,10-year bonds payable at95 on December 31,2018. At December 31,2020,George reported the bonds payable as follows:
Long-term Liabilities: |
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Bonds Payable | $700,000 | |
Less: Discount on Bonds Payable | (28,000) | $672,000 |
George's pays semiannual interest each June 30 and December 31. (Assume bonds payable are amortized using the straight-line amortization method.)
Requirements:
1. | Answer the following questions about George's bonds payable: | ||||||||
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2. | Record the June 30,2020 semiannual interest payment and amortization of discount. |
AND,
The accounting records of Path Leader Wireless include the following as of December 31,2018:
Accounts Payable | $74,000 |
| Salaries Payable | $10,000 |
Mortgages Payable (long-term) | 76,000 | Bonds Payable (current portion) | 24,000 | |
Interest Payable | 17,000 | Premium on Bonds Payable | 8,000 | |
Bonds Payable (long-term) | 62,000 | Unearned Revenue (short-term) | 3,200 | |
Total Stockholders' Equity | 165,000 |
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Requirements
1. | Report these liabilities on the Path Leader Wireless balance sheet, including headings and totals for current liabilities and long-term liabilities |
2. | Compute Path Leader Wireless's debt to equity ratio at December 31, 2018. |
Requirement 1. Report these liabilities on the Path LeaderPath Leader Wireless balance sheet, including headings and totals for current liabilities and long-term liabilities.
Path Leader Wireless | |||||
Balance Sheet (Partial) | |||||
December 31, 2018 | |||||
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Total Liabilities |
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