Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Textbook Question
Chapter 14, Problem 14.38BE
Financial Statement Disclosure. Use the following excerpt from the financial statements of Fixet Company’s debt footnote (from Fixet Company’s 2018 annual report) to answer these questions:
- a. At December 31, 2018, what is the amount of the current portion of long-term debt?
- b. How much debt will mature over the next 5 years?
- c. What would be the difference in liabilities if Fixet reported the debt at fair values?
Fixet Company
Note 9—Long-Term Debt [Excerpt]
Long-term debt net of unamortized premiums and discounts and swap fair value adjustments is comprised of the following:
| In millions of U.S. dollars | December 31, 2018 |
| 5.66% Corporate bond, payable July 23, 2020 | $ 27.0 |
| 5.4% Corporate bond, payable August 7, 2020 | 16.1 |
| 4.7% Corporate bond, payable October 1, 2021 | 50.0 |
| 5.15% Corporate bond, payable December 15, 2023 | 110.4 |
| 4.3% Japanese yen note, payable June 26, 2025 | 1177 |
| 1.52125% Japanese yen note, payable February 14, 2020 | 55.1 |
| Total | 376.3 |
| Less current maturities | 7.4 |
| Non Current Portion | $368.9 |
The scheduled maturity of long-term debt m each of the years ending December 31, 2019, through 2023, is $7.4 million $172.1 million, $57.4 million $47.4 million, and $7.3 million at face value, respectively.
The Company’s long-term debt is recorded at adjusted cost, net of amortized premiums and discounts The fair value of long-term debt is estimated based upon quoted prices for similar instruments The fair value of the Company’s long-term debt including the current portion, was approximately $403 million at December 31, 2018.
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Preparing a Debt Disclosure
As of December 31, 2020, Dole Company’s long-term debt consisted of the following:
$146,050—Unsecured note payable to bank due 2021.
$517,500—Unsecured note payable to bank due 2023.
$690,000—Unsecured note payable to bank due 2025.
$103,500—Secured mortgage payable to bank due in equal installments 2021 through 2025.
$184,000—Secured note payable to bank due in 2026.
Prepare the required financial statement disclosure at December 31, 2020, indicating the amounts due in each of the next five years and thereafter.
NotePayable
Year 12021
Year 22022
Year 32023
Year 42024
Year 52025
Thereafter
$146,050
Answer
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517,500
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690,000
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103,500
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184,000
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The chief accountant of KYB Ltd has prepared and presented the following schedule for long term debt for the audit of financial statements for the year ended March 31, 2020:
Notes Payable Description
Interest Rates
Maturity Date
Opening Balance
Additions
Payments to date
Closing Balance
Mortgage Payable
4.5%
2050
2,415,886
172,757
2,588,643
Unsecured Notes Payable
5.5%
2030
5,879,800
850,000
5,029,800
Secured Bonds
5.75%
2021
6,228,000
1,272,000
7,500,000
Convertibles Debentures
3.5%
2025
3,500,000
3,500,00
Total
14,520,686
4,944,757
850,000
18,615,443
Required:
Describe substantive procedures the auditor should perform to confirm the transactions in the schedule above for the year-end.
10. Powell Corporation includes the following selected accounts in its general ledger at December 31, 2025:
View the selected accounts.
Prepare the liabilities section of Powell Corporation's balance sheet at December 31, 2025.
Plus:
Total Liabilities
Powell Corporation
Balance Sheet (Partial)
December 31, 2025
Selected Accounts
-
☑
Notes Payable (long-term)
55,000
Bonds Payable (long-term)
215,000
Interest Payable (due next year)
Sales Tax Payable
$
780
640
Accounts Payable
20,000
Premium on Bonds Payable
5,950
Salaries Payable
1,840
Estimated Warranty Payable
1,000
Print
Done
Chapter 14 Solutions
Intermediate Accounting (2nd Edition)
Ch. 14 - What conditions or terms does a note payable...Ch. 14 - If the market rate of interest exceeds the face or...Ch. 14 - What is included in bond issue costs and how...Ch. 14 - Prob. 14.4QCh. 14 - When a bond is issued at a discount, will its...Ch. 14 - Prob. 14.6QCh. 14 - Prob. 14.7QCh. 14 - Under IFRS, how do firms account for convertible...Ch. 14 - Prob. 14.9QCh. 14 - Can companies reclassify short-term debt expected...
Ch. 14 - Under IFRS, can companies reclassify short-term...Ch. 14 - Do companies always reclassify long-term debt that...Ch. 14 - Prob. 14.13QCh. 14 - Prob. 14.14QCh. 14 - Prob. 14.15QCh. 14 - Prob. 14.16QCh. 14 - Prob. 14.1MCCh. 14 - Prob. 14.2MCCh. 14 - Prob. 14.3MCCh. 14 - Prob. 14.4MCCh. 14 - Prob. 14.5MCCh. 14 - Clothes Horse Corp. (CHC) Issued 500,000 bonds due...Ch. 14 - Prob. 14.7MCCh. 14 - Prob. 14.8MCCh. 14 - Prob. 14.9MCCh. 14 - Prob. 14.10MCCh. 14 - Prob. 14.11MCCh. 14 - Prob. 14.1BECh. 14 - Notes Payable. Using the information provided in...Ch. 14 - Prob. 14.3BECh. 14 - Prob. 14.4BECh. 14 - Prob. 14.5BECh. 14 - Prob. 14.6BECh. 14 - Bond Terminology. Match each term with its...Ch. 14 - Bond Pricing. Fill in the missing items for each...Ch. 14 - Prob. 14.9BECh. 14 - Bond Issue Price. Using the information from...Ch. 14 - Prob. 14.11BECh. 14 - Prob. 14.12BECh. 14 - Prob. 14.13BECh. 14 - Prob. 14.14BECh. 14 - Prob. 14.15BECh. 14 - Prob. 14.16BECh. 14 - Prob. 14.17BECh. 14 - Prob. 14.18BECh. 14 - Bonds Issued between Interest Payment Dates. For...Ch. 14 - Prob. 14.20BECh. 14 - Prob. 14.21BECh. 14 - Prob. 14.22BECh. 14 - Prob. 14.23BECh. 14 - Prob. 14.24BECh. 14 - Prob. 14.25BECh. 14 - Prob. 14.26BECh. 14 - Prob. 14.27BECh. 14 - Prob. 14.28BECh. 14 - Prob. 14.29BECh. 14 - Prob. 14.30BECh. 14 - Short-Term Debt Expected to Be Refinanced, IFRS....Ch. 14 - Prob. 14.32BECh. 14 - Prob. 14.33BECh. 14 - Prob. 14.34BECh. 14 - Prob. 14.35BECh. 14 - Fair Value Option. Saratoga Company issued bonds...Ch. 14 - Prob. 14.37BECh. 14 - Financial Statement Disclosure. Use the following...Ch. 14 - Prob. 14.1ECh. 14 - Prob. 14.2ECh. 14 - Prob. 14.3ECh. 14 - Prob. 14.4ECh. 14 - Prob. 14.5ECh. 14 - Bond Issue, Interest Payments, Effective Interest...Ch. 14 - Prob. 14.7ECh. 14 - Prob. 14.8ECh. 14 - Prob. 14.9ECh. 14 - Prob. 14.10ECh. 14 - Prob. 14.11ECh. 14 - Prob. 14.12ECh. 14 - Convertible Bonds, Conversion. On January 1, 2018,...Ch. 14 - Convertible Bonds, Conversion. Using the...Ch. 14 - Prob. 14.15ECh. 14 - Prob. 14.16ECh. 14 - Prob. 14.17ECh. 14 - Prob. 14.18ECh. 14 - Warrants. DHC Associates issued 2,100 of its...Ch. 14 - Prob. 14.20ECh. 14 - Prob. 14.21ECh. 14 - Prob. 14.1PCh. 14 - Long-Term Notes Payable, Semiannual Interest,...Ch. 14 - Note Payable Issued at a Discount with...Ch. 14 - Prob. 14.4PCh. 14 - Prob. 14.5PCh. 14 - Bond Issue, Interest Payments, Effective Interest...Ch. 14 - Prob. 14.7PCh. 14 - Bonds Sold between Interest Dates at a Discount,...Ch. 14 - Prob. 14.9PCh. 14 - Prob. 14.10PCh. 14 - Convertible Bonds, Bond Issue Costs, Conversion....Ch. 14 - Prob. 14.12PCh. 14 - Prob. 14.13PCh. 14 - Prob. 1JCCh. 14 - Prob. 2JCCh. 14 - Prob. 3JCCh. 14 - Prob. 1FSCCh. 14 - Prob. 1SSCCh. 14 - Surfing the Standards Case 2: Bonds with...Ch. 14 - Prob. 1BCC
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