Question 1

Whitmore Corporation Issues a £1,800,000, 10%, 10-year mortgage on December 31, 2017. The terms call for semi-annual installment payments of £144,435.The entry to record the first installment payment will include

Accepted Answer

The first installment payment includes both interest and principal. The interest for the first period is £90,000 (10% annual rate on £1,800,000, divided by 2 for semi-annual), so the principal reduction is £54,435 (£144,435 total payment - £90,000 interest).

Question 2

On January 1, 2017, Michelin Company, a calendar-year company, issued €9,000,000 of mortgage notes payable, of which €3,000,000 is due on January 1 for each of the next three years. The proper statement of financial position presentation on December 31, 2017, is

Accepted Answer

The €3,000,000 due within one year should be classified as current liabilities, while the remaining €6,000,000 should be classified as long-term debt. Therefore, the proper presentation would be current liabilities of €3,000,000 and long-term debt of €6,000,000.

Question 3

Finney Company borrowed €1,600,000 from BankTwo on January 1, 2016 in order to expand its mining capabilities. The five-year note required annual payments of €416,698 and carried an annual interest rate of 9.5%. What is the balance in the notes payable account at December 31, 2017 after the annual payment?

Accepted Answer

The answer of Finney Company borrowed €1,600,000 from BankTwo on...

Question 4

Selected data from 2017 financial statements of Xi Corporation include the following (amount in millions): $\begin{array}{lr}
\text { Current assets } & ¥ 759 \
\text { Total assets } & 1,200 \
\text { Current liabilities } & 400 \
\text { Total liabilities } & 750 \
\text { Cash } & 80 \
\text { Interest expense } & 50 \
\text { income taxes } & 100 \
\text { Net income } & 160
\end{array}$ The debt to assets ratio is

Accepted Answer

The answer of Selected data from 2017 financial statements of...

Question 5

The adjusted trial balance for Beneteau Corporation at the end of the 2017 included the following accounts: $\begin{array}{lr}
\text { 5-year Bonds Payable 8\% } & € 6,620,000 \
\text { Bond Interest Payable } & 240,000 \
\text { Notes Payable (3 mo.) } & 50,000 \
\text { Notes Payable }(5 \mathrm{yr} .) & 1,650,000\\text { Mortgage Payable ( } € 150,000 \text { due currently) } & 2,000,000 \
\text { Salaries and Wages Payable } & 68,000 \
\text { Taxes Payable (due } 3 / 15 \text { of next vear) } & 85,000
\end{array}$ The total non-current liabilities reported on the statement of financial position at December 31, 2017 are

Accepted Answer

The answer of The adjusted trial balance for Beneteau Corporation...

Quiz 9: Reporting and Analyzing Liabilities

Whitmore Corporation Issues a £1,800,000, 10%, 10-year mortgage on December 31, 2017. The terms call for semi-annual installment payments of £144,435.The entry to record the first installment payment will include

On January 1, 2017, Michelin Company, a calendar-year company, issued €9,000,000 of mortgage notes payable, of which €3,000,000 is due on January 1 for each of the next three years. The proper statement of financial position presentation on December 31, 2017, is