Question

11. (Percentage of sales-bonds payable) A company listed bonds payable in its year-end balance sheet, of which $500,000 was reported as a current liability. Next year another $500,000 will become current. Forecast its end-of-coming-year balance of “bonds payable-current” and “bonds payable-long term” if this year's year-end balance of bonds payable — long-term is: a. $500,000 b. $2,500,000 c. $5,000,000 d. $10,000,000

Answer 1

End of year balance of "bonds payable - current" and "bonds payable - long term" in given situations, when $500,000 is repaid every year, shall be as follows :

a. When current year's year end balance of bonds payable - long term is $500,000 :

bonds payable - current = $500,000

bonds payable - long term = Nil

b. When current year's year end balance of bonds payable - long term is $2,500,000 :

bonds payable - current = $500,000

bonds payable - long term = $2,000,000

c.

When current year's year end balance of bonds payable - long term is $5,000,000 :

bonds payable - current = $500,000

bonds payable - long term = $4,500,000

d. When current year's year end balance of bonds payable - long term is $10,000,000 :

bonds payable - current = $500,000

bonds payable - long term = $9,500,000