Problem 1-7 (IAA)Cavalier Company provided the following information onDecember 31, 2020:Accounts payableNotes payable -bankInterest payableMortgage note payable – 10%Bonds payable6,500,0008,000,000150,0002,000,0004,000,000Bank notes payable include two separate notes payable toFirst Bank.A P3,000,000, 10% note issued March 1, 2019, payable ondemand. Interest is payable every six months.A one-year, P5,000,000, 11% note issued January 2, 2020.On December 31, 2020, 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, 2021.The 10% mortgage note was issued October 1, 2019 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, 2020, the entity is three months behind inpaying the required interest payment.The bonds payable are 10-year, 8% bonds, issued June 30,2011. Interest is payable semiannually on June 30 andDecember 31.Required:Compute the total current liabilities on December 31, 2020.

Current liabilities can be defined as the current financial obligation of the business entity. It is…

Answered: Compute the total current liabilities…

Business

Accounting

Compute the total current liabilities on December 31, 2020.

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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