Intermediate Accounting II week 7

Intermediate Accounting II week 7 - On December 31, 2010,...

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Unformatted text preview: On December 31, 2010, Excello Electric Company had $1 million of short-term notes payable due February 7, 2011. Excello expected to refinance these notes on a long-term basis. On January 15, 2011 the company issued bonds with a face value of $900,000 at 98; brokerage fees and other costs of issuance were $3,450. On January 22, 2011 the proceeds from the bond issue plus additional cash held by the company on December 31, 2010 were used to liquidate the $1 million of short-term notes. The December 31, 2010 balance sheet is issued on February 12, 2011. Required Prepare a partial balance sheet as of December 31, 2010 showing how the $1 million of short-term notes payable should be disclosed. Include an appropriate footnote for proper disclosure. E13-19 Short-term Debt Expected to Be Refinanced Name: Martinia Akers An asterisk (*) will appear next to an incorrect amount(s) in the outlined cell(s). If you are a red asterisk, and think the answer is correct, but used a formula in the cell try manually in the answer according to the rounding instructions. Required Prepare a partial balance sheet as of December 31, 2010 showing how the $1 million of short-term notes payable should be disclosed. Include an appropriate footnote for proper disclosure. EXCELLO ELECTRIC COMPANY Partial Balance Sheet December 31, 2010 Current Liabilities $121,450 Long-Term Liabilities 878,550 Calculation of Liabilities: Total Short-term Notes- LT Liabilities = Current Liabilities $1,000,000 $878,550 $121,450 Face Value x % Face Value = Carrying Amount of Bond $900,000 98% $882,000 Carrying Amount- Fees & Exp. = Ending Long-term Liabilities $882,000 3,450 $878,550 Note 1. 1. January 15, 2011 2. $900,000 3. 98 4. $3,450 5. net proceeds 6. ($878,550) 7. $1,000,000 8. January 22, 2011 E13-19 Short-term Debt Expected to Be Refinanced Notes Payable a (Note 1) Notes Payable b (Note 1) a Current Liabilities - Notes Payable b Long-term Liabilities - Notes Payable On (1) , Excello Bectric Company issued bonds with a face of (2) at (3) , with brokerage fees and other costs of issuance totaling (4) . The (5) of this issue (6) were used, along with additional cash, to retire (7) in short-term debt. This occurred on (8) . For each number show in the note above select the correct date, word, or amount from the drop down menu that should be used in its place to complete the note: Name: Solutions An asterisk (*) will appear next to an incorrect amount(s) in the outlined cell(s). If you are a red asterisk, and think the answer is correct, but used a formula in the cell try manually in the answer according to the rounding instructions. Required Prepare a partial balance sheet as of December 31, 2010 showing how the $1 million of short-term notes payable should be disclosed. Include an appropriate footnote for proper disclosure....
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Intermediate Accounting II week 7 - On December 31, 2010,...

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