Question

At December 31, 2017, Hyasaki Corporation has the following account balances: Bonds payable, due January 1, 2026 $2000000 Discount on bonds payable 88000 Interest payable 80000 Show how the above accounts should be presented on the December 31, 2017, balance sheet, including the proper classifications.

Answer 1

			Hyasaki Corporation
			Balance Sheet
			December 31,2017
ASSETS	$	$	LIABILITIES and STOCK HOLDERS' EQUITY	$	$
Current Asset			Current Liabilities
			Interest Payable		80,000
Non Current Asset			Long Term Liabilities
			Bonds Payable	2,000,000
			Less-Discount on Bonds Payable	(88,000)	1,912,000
			Total Liabilities
			Stock Holders' Equity
Total Asset			Total Liabilities and Stock Holders Equity

Note	1.Since Bonds Payable are after more than one Year,i.e. in January 1,2026, it is reported as Long Term Liabilities
	2.Discount on Bonds Payable will always appear on the Balance Sheet with Bonds Payable. For Example if Bonds Payable is a Long Term Liability, discount on bonds payable will be reported as deduction from bonds payable under Long Term Liabilities.
	3. Balance Sheet is prepared in Account Form. It can also be prepared in report form. In both the form Bonds payable and discount on bonds payable will appear under Long term liabilities (Non Current Liabilities). And Interest Payable under Current Liabilities.
	4. Interest is assumed to be payable within one year, so it is reported under Current liabilities.