At December 31, 2020, RB Company has outstanding three long-term debt issues. The first is a...

At December 31, 2020, RB Company has outstanding three long-term debt issues. The first is a $2,120,000 note payable which matures June 30, 2023. The second is a $6,840,000 bond issue which matures September 30, 2024. The third is a $12,580,000 sinking fund debenture with annual sinking fund payments of $2,516,000 in each of the years 2022 through 2026.

Prepare the required note disclosure for the long-term debt at December 31, 2020.

		Long-term Debt
2021		$enter a dollar amount
2022		$enter a dollar amount
2023		$enter a dollar amount
2024		$enter a dollar amount
2025		$enter a dollar amount

Solutions

Expert Solution

Long term debt means debt whose remaining period for maturity is more than 12 months. Below are the notes related to Long term debt disclosure in the financial statements:

On 31st December 2021, sinking fund payable in the year 2022 is to be treated as current liabilities and hence to be excluded from long term debt. On 31st December 2022, notes payable are short term as their maturity date is 30th June 2023 which is less than 12 months, hence to be considered in short term debt. Siniking fund payable in the year 2023 is also short term, hence shown accordingly.On 31st December 2023, Bonds are to redeemable on 30th September 2024, within 9 months hence not to be consider as long term debt. Sinking fund payable for the year 2024 is also to be excluded from long term debt. On 31st December 2024, only sinking fund payable for the year 2026 is long term debt. On 31st December 2025, sinking fund payable in the 2026 is short term and hence no long term debt as on 31st December 2025 is there.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Exercise 14-20 At December 31, 2017, Grouper Company has outstanding three long-term debt issues. The first...

Exercise 14-20 At December 31, 2017, Grouper Company has outstanding three long-term debt issues. The first is a $2,050,000 note payable which matures June 30, 2020. The second is a $5,920,000 bond issue which matures September 30, 2021. The third is a $12,810,000 sinking fund debenture with annual sinking fund payments of $2,562,000 in each of the years 2019 through 2023. Prepare the required note disclosure for the long-term debt at December 31, 2017. Long-term Debt 2018 $ 2019 $...

The Smathers Company has a long-term debt ratio (i.e., the ratio of long-term debt to long-term...

The Smathers Company has a long-term debt ratio (i.e., the ratio of long-term debt to long-term debt plus equity) of .43 and a current ratio of 1.27. Current liabilities are $2,395, sales are $10,465, profit margin is 11 percent, and ROE is 16 percent. What is the amount of the firm’s long-term debt? (Do not round intermediate calculations and your answer to 2 decimal places, e.g., 32.16.) What is the amount of the firm’s total debt? (Do not round intermediate...

MacDonald Corp. had the following securities outstanding at its year-end 31 December 20X7: Long-term debt: Notes...

MacDonald Corp. had the following securities outstanding at its year-end 31 December 20X7: Long-term debt: Notes payable, 14% $4,500,000 8% convertible debentures, par value $2,500,000, net of discount 2,410,000 9.5% convertible debentures, par value $2,500,000, net of discount 2,452,000 Equity: Preferred shares, $5 dividend, payable as $1.25 per quarter, no-par, cumulative convertible shares; authorized, 100,000 shares; issued, 30,000 shares 4,700,000 Common shares, no-par; authorized, 5,000,000 shares; issued, 600,000 shares 2,000,000 Common share conversion rights 189,000 Additional information: a. 20X7 net...

The Arkham Company has a ratio of long-term debt to long-term debt plus equity of .43...

The Arkham Company has a ratio of long-term debt to long-term debt plus equity of .43 and a current ratio of 1.5. Current liabilities are $990, sales are $6,410, profit margin is 9.3 percent, and ROE is 20.4 percent. What is the amount of the firm’s net fixed assets? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Net fixed assets = neither of these are the answer 5362.74, 3,683.75, 5378.53

The Arkham Company has a ratio of long-term debt to long-term debt plus equity of .39...

The Arkham Company has a ratio of long-term debt to long-term debt plus equity of .39 and a current ratio of 1.7. Current liabilities are $950, sales are $6,370, profit margin is 9.8 percent, and ROE is 20 percent. What is the amount of the firm’s net fixed assets? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

On December 31, 2020, Crane Associates owned the following securities, held as a long-term investment. The...

On December 31, 2020, Crane Associates owned the following securities, held as a long-term investment. The securities are not held for influence or control of the investee. Common Stock Shares Cost Gehring Co. 2,000 $60,000 Wooderson Co. 5,200 36,400 Kitselton Co. 1,400 25,200 On December 31, 2020, the total fair value of the securities was equal to its cost. In 2021, the following transactions occurred: Aug. 1 Received $0.50 per share cash dividend on Gehring Co. common stock. Sept. 1...

On December 31, 2020, Ivanhoe Associates owned the following securities, held as a long-term investment. The...

On December 31, 2020, Ivanhoe Associates owned the following securities, held as a long-term investment. The securities are not held for influence or control of the investee. Common Stock Shares Cost Gehring Co. 2,000 $64,000 Wooderson Co. 5,200 36,400 Kitselton Co. 1,800 39,600 On December 31, 2020, the total fair value of the securities was equal to its cost. In 2021, the following transactions occurred: Aug. 1 Received $0.50 per share cash dividend on Gehring Co. common stock. Sept. 1...

The December 31, 2013, balance sheet of Schism, Inc., showed long-term debt of $1,280,000, $120,000 in...

The December 31, 2013, balance sheet of Schism, Inc., showed long-term debt of $1,280,000, $120,000 in the common stock account and $2,120,000 in the additional paid-in surplus account. The December 31, 2014, balance sheet showed long-term debt of $1,410,000, $135,000 in the common stock account and $2,380,000 in the additional paid-in surplus account. The 2014 income statement showed an interest expense of $93,400 and the company paid out $135,000 in cash dividends during 2014. The firm’s net capital spending for...

The December 31, 2015, balance sheet of Schism, Inc., showed long-term debt of $1,385,000, $137,000 in...

The December 31, 2015, balance sheet of Schism, Inc., showed long-term debt of $1,385,000, $137,000 in the common stock account, and $2,620,000 in the additional paid-in surplus account. The December 31, 2016, balance sheet showed long-term debt of $1,550,000, $147,000 in the common stock account, and $2,920,000 in the additional paid-in surplus account. The 2016 income statement showed an interest expense of $92,500 and the company paid out $142,000 in cash dividends during 2016. The firm’s net capital spending for...

The December 31, 2015, balance sheet of Schism, Inc., showed long-term debt of $1,405,000, $141,000 in...

The December 31, 2015, balance sheet of Schism, Inc., showed long-term debt of $1,405,000, $141,000 in the common stock account, and $2,660,000 in the additional paid-in surplus account. The December 31, 2016, balance sheet showed long-term debt of $1,590,000, $151,000 in the common stock account, and $2,960,000 in the additional paid-in surplus account. The 2016 income statement showed an interest expense of $94,500 and the company paid out $146,000 in cash dividends during 2016. The firm’s net capital spending for...

Subjects