Canton Cave Company provided the following schedule of liabilities on December 31, 2019:Accounts payableNotes payable-bankInterest payableMortgage payable-10%Bonds payable*Bank notes payable include two separate notes payable to First Bank> AP3, 000,000, 10% note issued March 1, 2018, payable on demand. Interest is payable every six6,500,0008,000,000150,0002,000,0004,000,000months.> A one-year, P5,000,000, 11% note issued January 2, 2019. On December 31, 2019, Canton Cavenegotiated a written agreement with First Bank to replace the note with a 2-year, P5,000,000, 10%note issued January 2, 2020.*The 10% mortgage note was issued October 1, 2016 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 amonthly interest within 10 days of the date the payment is due.On December 31, 2019, Canton Cave is three months behind in paying its required initial payment.The bonds payable are 10-year, 8% bonds, issued June 30, 2002.Interest is payable semiannually on June 30and December 31.Required: Compute the total current liabilities on December 31 2019. Intercom Company is planning to refinance certain short-term obligations on a long term basis. The entity hasa December 31 year-end and the 201 9 financial statements will be published on March 15, 2020.On December 31, 2019, before reclassification of short-term debt, the liabilities are:Current liabilities:Accounts PayableNote payable-bankAccrued expenses7,000,00012,000,0004,000,000Noncurrent liabilities:Mortgage payableNote payable-due in 20214,000,0003,000,000The entity intends to refinance P9,000,000 of theP 12,000,000 bank note payable on a long term basisAlthough the entire P12,000,000 is due on June 30, 2020, the bank has informally agreed to extend thematurity date forP 6,000,000 to June 30, 2021, if necessary.On January 31, 2020, the entity issued share capital forP 4,000,000, net issue costs and underwriting fees ofP500,000.On February 15, 2020, the entity entered into a financing agreement with a financially capable commercialbank, permitting the entity to borrow up to P3,000,000.Borrowings available at the entity's option on April 1,2020 will mature five years after the loan date.The entity uses the entire part of the current note payable and now intends to draw down the entire availablecommitment of the five-year year debt on April 1, 2020.Required: Prepare the liability section of the statement of financial position on December 31, 2019.

SOLUTION- NOTE- 11% NOTE-BANK WOULD BE TREATED AS A LONG TERM LIABILITY AS IT HAS BEEN NEGOTIATED…

Canton Cave Company provided the following schedule of liabilities on December 31, 2019: Accounts payable Notes payable-bank Interest payable Mortgage payable-10% Bonds payable *Bank notes payable include two separate notes payable to First Bank > AP3, 000,000, 10% note issued March 1, 2018, payable on demand. Interest is payable every six months. > A one-year, P5,000,000, 11% note issued January 2, 2019. On December 31, 2019, Canton Cave negotiated a written agreement with First Bank to replace the note with a 2-year, P5,000,000, 10 % note issued January 2, 2020. 6,500,000 8,000,000 150,000 2,000,000 4,000,000 *The 10% mortgage note was issued October 1, 2016 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 within 10 days of the date the payment is due. On December 31, 2019, Canton Cave is three months behind in paying its required initial payment. The bonds payable are 10-year, 8% bonds, issued June 30, 2002.Interest is payable semiannually on June 30 and December 31. Required: Compute the total current liabilities on December 31 2019.

Canton Cave Company provided the following schedule of liabilities on December 31, 2019: Accounts payable Notes payable-bank Interest payable Mortgage payable-10% Bonds payable Bank notes payable include two separate notes payable to First Bank > AP3, 000,000, 10% note issued March 1, 2018, payable on demand. Interest is payable every six months. > A one-year, P5,000,000, 11% note issued January 2, 2019. On December 31, 2019, Canton Cave negotiated a written agreement with First Bank to replace the note with a 2-year, P5,000,000, 10 % note issued January 2, 2020. 6,500,000 8,000,000 150,000 2,000,000 4,000,000 The 10% mortgage note was issued October 1, 2016 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 within 10 days of the date the payment is due. On December 31, 2019, Canton Cave is three months behind in paying its required initial payment. The bonds payable are 10-year, 8% bonds, issued June 30, 2002.Interest is payable semiannually on June 30 and December 31. Required: Compute the total current liabilities on December 31 2019.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 16E

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