2. The ledger of INFIRM SICK Co. as of December 31, 20x1 includes the following: 10% Note payable 12% Note payable 14% Mortgage note payable Interest payable 80,000 120,000 60,000 Additional information: - INFIRM Co.'s financial statements were authorized for issue on April 15, 20x2. - The 10% note payable is due on July 1, 20x2 and pays semi-annual interest every July 1 and December 31. On January 28, 20x2, INFIRM Co. entered into a refinancing agreement with a bank to refinance the entire note by issuing a long-term obligation. - The 12% note payable is due on March 31, 20x2 and pays annual interest every March 31. On January 31, 20x2, INFIRM Co. extended the maturity of the note to March 31, 20x3 under the existing loan agreement. The extension of maturity date is at the option of INFIRM. - The 14% mortgage note is due on December 31, 20x9. Per agreement with the creditor, INFIRM is to pay quarterly interests on the note, failure to do so will render the note payable on demand. INFIRM failed to pay the 3rd and 4th quarterly interests on the note during 20x1. How much is the total current liabilities? a. 119,000 b. 155,000 c. 172,000 d. 189.000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
100%
2. The ledger of INFIRM SICK Co. as of December 31, 20x1 includes the following:
10% Note payable
12% Note payable
14% Mortgage note
payable
Interest payable
80,000
120,000
60,000
Additional information:
- INFIRM Co.'s financial statements were authorized for issue on April 15, 20x2.
- The 10% note payable is due on July 1, 20x2 and pays semi-annual interest every July 1 and
December 31. On January 28, 20x2, INFIRM Co. entered into a refinancing agreement with a bank to
refinance the entire note by issuing a long-term obligation.
- The 12% note payable is due on March 31, 20x2 and pays annual interest every March 31. On January
31, 20x2, INFIRM Co. extended the maturity of the note to March 31, 20x3 under the existing loan
agreement. The extension of maturity date is at the option of INFIRM.
- The 14% mortgage note is due on December 31, 20x9. Per agreement with the creditor, INFIRM is to
pay quarterly interests on the note, failure to do so will render the note payable on demand. INFIRM
failed to pay the 3rd and 4th quarterly interests on the note during 20x1.
How much is the total current liabilities?
а. 119,000
b. 155,000
с. 172,000
d. 189,000
Transcribed Image Text:2. The ledger of INFIRM SICK Co. as of December 31, 20x1 includes the following: 10% Note payable 12% Note payable 14% Mortgage note payable Interest payable 80,000 120,000 60,000 Additional information: - INFIRM Co.'s financial statements were authorized for issue on April 15, 20x2. - The 10% note payable is due on July 1, 20x2 and pays semi-annual interest every July 1 and December 31. On January 28, 20x2, INFIRM Co. entered into a refinancing agreement with a bank to refinance the entire note by issuing a long-term obligation. - The 12% note payable is due on March 31, 20x2 and pays annual interest every March 31. On January 31, 20x2, INFIRM Co. extended the maturity of the note to March 31, 20x3 under the existing loan agreement. The extension of maturity date is at the option of INFIRM. - The 14% mortgage note is due on December 31, 20x9. Per agreement with the creditor, INFIRM is to pay quarterly interests on the note, failure to do so will render the note payable on demand. INFIRM failed to pay the 3rd and 4th quarterly interests on the note during 20x1. How much is the total current liabilities? а. 119,000 b. 155,000 с. 172,000 d. 189,000
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Accounting for Long-term liabilities
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education