At December 31, 2017, Headland Company has outstanding three long-term debt issues. The first is a $1,680,000 note payable which matures June 30, 2020. The second is a $5,210,000 bond issue which matures September 30, 2021. The third is a $11,130,000 sinking fund debenture with annual sinking fund payments of $2,226,000 in each of the years 2019 through 2023.
Prepare the required note disclosure for the long-term debt at December 31, 2017.
What Are Long-Term Liabilities:
A company must separate is Current and Long-Term Liabilities on the balance sheet according to GAAP. Long-Term Liabilities are those that the entity expects to settle at a point in time that is beyond 12 months (or one operating cycle) from the reporting date.
Answer and Explanation:
See below. The disclosure required for long-term debt involves showing the maturity of the various debt instruments that are classified as long term.
|Instrument||Maturing in 2018||Maturing in 2019||Maturing in 2020||Maturing in 2021||Maturing in 2022||Maturing in 2023|
|Sinking fund debenture||N/A||2,226,000||2,226,000||2,226,000||2,226,000||2,226,000|
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from Accounting 101: Financial AccountingChapter 10 / Lesson 6