QUESTION #11 The adjusted trial balance for Payne Corporation at the end of 2017

Question

QUESTION #11 The adjusted trial balance for Payne Corporation at the end of 2017 contai following accounts: ned the Bonds payable, 10% Bond interest payable. .. Discount on bonds payabl. Lease liability Mortgage notes payable, 9%, due 2018 Accounts payable.... . $800,000 20,000 40,000 60,000 80,000 120,000 Instructions (a) Prepare the long-term liabilities section of the balance sheet. (b) Indicate the proper balance sheet classification for the accounts listed above that do not belong in the long-term liabilities section.

Explanation / Answer

Solution a:

Solution b:

Bond interest payable - Current liabilities

Mortgage notes payable, 9% due 2018 - Current liabilities as it is due with in 1 year

Accounts payable - Current laibilities

Balance Sheet (Partial) Payne Corporation As of December 31, 2017 Particulars Amount Long term liabilities: Bonds payable 10% $800,000.00 Less : Discount on bond payable $40,000.00 Bond Payable, net $760,000.00 Lease liability $60,000.00 Total long term liabilities $820,000.00

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