ch14e1e5e7 - EXERCISE 14-1 (1520 minutes) (a) (b) (c) (d)...

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EXERCISE 14-1 (15–20 minutes) (a) Current liability if current assets are used to satisfy the debt. (b) Valuation account relating to the long-term liability, bonds payable (sometimes referred to as an adjunct account). The $3,000 would continue to be reported as long-term. (c) Current liability, $250,000; long-term liability, $750,000. (d) Current liability. (e) Probably noncurrent, although if operating cycle is greater than one year and current assets are used, this item would be classified as current. (f) Current liability. (g) Current liability unless (a) a fund for liquidation has been accumulated which is not classified as a current asset or (b) arrangements have been made for refinancing. (h) Current liability. (i) Current liability. EXERCISE 14-5 (15–20 minutes) (a) 1/1/11 Cash ($800,000 X 102%). .......................... 816,000 Bonds Payable. ................................ 800,000 Premium on Bonds Payable. .......... 16,000 (b) 7/1/11 Interest Expense ($816,000 X 9.7705% X 1/2).
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This note was uploaded on 01/20/2012 for the course ACCT 407 taught by Professor Price during the Spring '11 term at Jones Intl..

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ch14e1e5e7 - EXERCISE 14-1 (1520 minutes) (a) (b) (c) (d)...

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