The following items are found in the financial statements. Indicate how each of

Question

The following items are found in the financial statements.

Indicate how each of these items should be classified in the financial statements.

Classification (a) Discount on bonds payable

Balance Sheet Income statement

(b) Interest expense (credit balance)

Balance Sheet Income statement

(c) Unamortized bond issue costs

Balance Sheet Income statement

(d) Gain on repurchase of debt

Balance Sheet Income statement

(e) Mortgage payable (payable in equal amounts over next 3 years)

Balance Sheet Income statement

(f) Debenture bonds payable (maturing in 5 years)

Balance Sheet Income statement

(g) Notes payable (due in 4 years)

Balance Sheet Income statement

(h) Premium on bonds payable

Balance Sheet Income statement

(i) Bonds payable (due in 3 years)

Balance Sheet Income statement

Explanation / Answer

Answers

Indicate how each of these items should be classified in the financial statements.

S. no

Classified under:

(a)

Discount on bonds payable

Balance Sheet, on asset side

(b)

Interest expense (credit balance)

Income statement, as a revenue Item

(c)

Unamortized bond issue costs

Balance Sheet

(d)

Gain on repurchase of debt

Income statement, as a revenue item

(e)

Mortgage payable (payable in equal amounts over next 3 years)

Balance Sheet, under Long term Liabilities

(f)

Debenture bonds payable (maturing in 5 years)

Balance Sheet, under long term liabilities

(g)

Notes payable (due in 4 years)

Balance Sheet, under long term liabilities

(h)

Premium on bonds payable

Balance Sheet, as Liabilities

(i)

Bonds payable (due in 3 years)

Balance Sheet, as Liabilities.

Indicate how each of these items should be classified in the financial statements.

S. no

Classified under:

(a)

Discount on bonds payable

Balance Sheet, on asset side

(b)

Interest expense (credit balance)

Income statement, as a revenue Item

(c)

Unamortized bond issue costs

Balance Sheet

(d)

Gain on repurchase of debt

Income statement, as a revenue item

(e)

Mortgage payable (payable in equal amounts over next 3 years)

Balance Sheet, under Long term Liabilities

(f)

Debenture bonds payable (maturing in 5 years)

Balance Sheet, under long term liabilities

(g)

Notes payable (due in 4 years)

Balance Sheet, under long term liabilities

(h)

Premium on bonds payable

Balance Sheet, as Liabilities

(i)

Bonds payable (due in 3 years)

Balance Sheet, as Liabilities.

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