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The following items might appear on the balance sheet of a corporation that has a two-month operating cycle. Classify each item as either current liability,
The following items might appear on the balance sheet of a corporation that has a two-month operating cycle. Classify each item as either current liability, long-term liability, or not a liability. (a) Interest receivable. (b) Mortgage payable (portion due in 5 years). (c) Accounts payable in 6 months. (d) Wages payable. (e) Notes payable (due in 12 months). (Select One) (Select One) (Select One) (Select One) (Select One) On January 1, 2014, XYZ Corporation borrowed $199,000 from the bank. Interest is calculated at the rate of 10% and the term of the note is four years. Four equal annual payments will be made in the amount of $62,779 each December 31. The payment schedule is shown below: Year 2014 2015 Annual Principal Portion of Payment Payment 62,779 42,879 62,779 47,167 62,779 51,884 62,779 57,070 Interest Portion of Payment 19,900 15,612 10,895 5,709 Principal Balance at Year-End 156,121 108,954 57,070 0 2016 2017 a) Show how XYZ Corporation will show the note on the year-end December 31, 2014 balance sheet. Liabilities Current Liabilities: (Select one) Long Term Liabilities: (Select one) b) Show how XYZ Corporation will show the note on the year-end December 31, 2015 balance sheet. Liabilities Current Liabilities: (Select one) Long Term Liabilities: (Select one)
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