★Problem 1-6 (IAA)Cavalier Company provided the following information onDecember 31, 2021:Accounts payableNotes payable-bankInterest payableMortgage note payable -10%Bonds payable✰6,600,0008,000,000Bank notes payable include two separate notes payable toFirst Bank150,0002,000,0004,000,000A P3,000,000, 10% note issued March 1, 2020, payable ondemand. Interest is payable every six months.A one-year, P5,000,000, 11% note issued January 2, 2021.On December 31, 2021, the entity negotiated a writtenagreement with First Bank to replace the note with a2-year, P5,000,000, 10% note to be issued January 2, 2022.The 10% mortgage note was issued October 1, 2020 with aterm of 10 years.Terms of the note give the holder the right to demandimmediate payment if the entity fails to make a monthlyinterest payment within 10 days of the date the payment isdue.On December 31, 2021, the entity is three months behind inpaying the required interest payment.Required:Compute total current liabilities on December 31, 2021.The bonds payable are 10-year, 8% bonds, issued June 30,2012. Interest is payable semiannually on June 30 andDecember 31.16

Current Liabilities :— Current liabilities are a company's short-term financial obligations that are…

1 Problem 1-6 (IAA) Cavalier Company provided the following information o on December 31, 2021: Accounts payable Notes payable-bank Interest payable Mortgage note payable -10% Bonds payable ✰ 6,600,000 8,000,000 Bank notes payable include two separate notes payable to First Bank: 150,000 2,000,000 4,000,000 A P3,000,000, 10% note issued March 1, 2020, payable on demand. Interest is payable every six months. A one-year, P5,000,000, 11% note issued January 2, 2021 On December 31, 2021, the entity negotiated a written agreement with First Bank to replace the note with 2-year, P5,000,000, 10% note to be issued January 2, 2022. a The 10% mortgage note was issued October 1, 2020 with a term of 10 years. Terms of the note give the holder the right to demand immediate payment if the entity fails to make a monthly interest payment within 10 days of the date the payment is due. On December 31, 2021, the entity is three months behind in paying the required interest payment. Required: Compute total current liabilities on December 31, 2021. The bonds payable are 10-year, 8% bonds, issued June 30, 2012. Interest is payable semiannually on June 30 and December 31. 16

1 Problem 1-6 (IAA) Cavalier Company provided the following information o on December 31, 2021: Accounts payable Notes payable-bank Interest payable Mortgage note payable -10% Bonds payable ✰ 6,600,000 8,000,000 Bank notes payable include two separate notes payable to First Bank: 150,000 2,000,000 4,000,000 A P3,000,000, 10% note issued March 1, 2020, payable on demand. Interest is payable every six months. A one-year, P5,000,000, 11% note issued January 2, 2021 On December 31, 2021, the entity negotiated a written agreement with First Bank to replace the note with 2-year, P5,000,000, 10% note to be issued January 2, 2022. a The 10% mortgage note was issued October 1, 2020 with a term of 10 years. Terms of the note give the holder the right to demand immediate payment if the entity fails to make a monthly interest payment within 10 days of the date the payment is due. On December 31, 2021, the entity is three months behind in paying the required interest payment. Required: Compute total current liabilities on December 31, 2021. The bonds payable are 10-year, 8% bonds, issued June 30, 2012. Interest is payable semiannually on June 30 and December 31. 16

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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