Need help answering the below questions. Thanks
Stockton Co. has a $20,000, two-year note payable to Lawton City Bank that matures June 30, 2012. Stockton's management intends to refinance the note for an additional three years and is negotiating a financing agreement with Lawton City. In order to exclude this note from current liabilities on its December 31, 2011, balance sheet, Stockton Co. must
| a. complete the refinancing before the balance sheet date. | | |
| b. complete the refinancing before the note's maturity date. | | |
| c. pay off the note and complete the refinancing before the 2011 financial statements are issued. | | |
| d. demonstrate an ability to refinance the obligation before the 2011 financial statements are issued. | |
Which one of the following is true when the effective-interest method of amortizing bond discount is used?
| a. Interest expense increases each period. | | |
| b. The interest rate decreases each period. | | |
| c. Interest expense as a percentage of the bonds' book value varies from period to period. | | |
| d. Interest expense remains constant for each period. | |
Which of the following represents a liability?
| a. The obligation to pay interest on a five-year note payable that was issued the last day of the current year. | | |
| b. The obligation to distribute shares of a company's own common stock next year as a result of a stock dividend declared near the end of the current year. | | |
| c. The obligation to pay for goods that a company expects to order from suppliers next year. | | |
| d. The obligation to provide goods that customers have ordered and paid for during the current year. | |
At December 31, 2012, Bennett Corp. owed notes payable of $1,000,000 with a maturity date of April 30, 2013. These notes did not arise from transactions in the normal course of business. On February 1, 2013, Bennett issued $3,000,000 of ten-year bonds with the intention of using part of the bond proceeds to liquidate the $1,000,000 of notes payable. Bennett's December 31, 2012, financial statements were issued on March 29, 2013. How much of the $1,000,000 notes payable should be classified as current in Bennett's balance sheet at December 31, 2012?
An action taken to reduce the risk associated with a related investment or action is known as a:
Which of the following restructuring is considered a significant economic event but does not require a gain or loss to be recognized?
| a. Modification of Terms: Total payment under new structure exceeds debt carrying value | | |
| b. Modification of Terms: Total payment under new structure is less than debt carrying value | | |
| c. Transfer of assets in full settlement (asset swap) | | |
| d. Grant of equity interest in full settlement (equity swap) | |
Common disclosure associated with long-term debt include all of the following except:
| a. conversion privileges. | | |
| b. the officers involved in securing the debt. | | |
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A loan backed by an asset that serves as collateral for the loan is known as:
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| d. a purchase commitment. | |
