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

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 2 years ago

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