On January 1, 2021, Lyle's Limeade issues 3%, 20-year bonds with a face amount of $83,000 for $71,647, priced to yield 4%. Interest is paid semiannually. What amount of interest expense will be recorded in the December 31, 2021, annual income statement?

Premium Pizza retires its 5% bonds for $58,000 before their scheduled maturity. At the time, the bonds have a face amount of $56,200 and a carrying value of $60,153.

Record the early retirement of the bonds

On January 1, 2021, Jalen Company purchased land costing $800,000. Instead of paying cash at the time of purchase, Jalen plans to make four installment payments of $215,221.64 on June 30 and December 31 in 2021 and 2022. The payments include interest at a rate of 6%.

Required:

Record the purchase of land when the note is issued.

Record the first installment payment on June 30, 2021, and the second installment payment on December 31, 2021.

Calculate the balance of Notes Payable and Interest Expense on December 31, 2021.

The Tony Hawk Skate Park was built in early 2021. The construction was financed by a $3,000,000, 7% note due in 6 years, with payments of $51,147 required each month. The first year has not been as profitable as hoped. The discussion at the executive board meeting at the end of 2021 focused on the potential need to obtain additional financing. However, board members are concerned that the company's debt level at the end of 2021 will make the company appear too risky to additional lenders. The balance of the note at the end of 2021 is $2,583,026. By the end of 2022, the 12 monthly payments will reduce the balance by an additional $447,116. Separate from the note, the company has the following amounts at the end of 2021: current assets of $3,100,000; current liabilities of $2,700,000; total equity of $4,000,000. Jim Trost, the VP of finance, tells board members that he plans to classify the full balance of the note at the end of 2021 as long-term because the full length of the note is six years. He explains that lenders will be more willing to let the company borrow and will offer a lower interest rate if the company reports fewer current liabilities. Plus, he plans to tell lenders that there is no problem with long-term solvency because the company long-term profits will be used to pay its long-term debt. Required: 1-a. Understand the reporting effect: By how much does Jims decision affect the reported amount of current liabilities versus long-term liabilities as of December 31, 2021?

2. Specify the options: Calculate the current ratio and the debt to equity ratio at the end of 2021 (a) with and (b) without Jims suggestion.