The creditors of Chester Company agree to accept promissorynotes for the amount of its indebtedness with a provisothat two-thirds of the annual profits must be appliedto their liquidation. How should these notes be reportedon the balance sheet of the issuing company? Give a reasonfor your answer.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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The creditors of Chester Company agree to accept promissory
notes for the amount of its indebtedness with a proviso
that two-thirds of the annual profits must be applied
to their liquidation. How should these notes be reported
on the balance sheet of the issuing company? Give a reason
for your answer.

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