Another Bond Question…..

  • Creator
    Topic
  • #813159
    mjbey1s
    Participant

    Able, Inc. had the following amounts of long-term debt outstanding at December 31, Year 1:
    14 1/2% term note, due Year 2 $ 3,000
    11 1/8% term note, due Year 5 107,000
    8% note, due in 11 equal annual principal payments, plus interest beginning December 31, Year 2 110,000
    7% guaranteed debentures, due Year 6 100,000
    Total $ 320,000
    Able’s annual sinking-fund requirement on the guaranteed debentures is $4,000 per year. What amount should Able report as current maturities of long-term debt in its December 31, Year 1, balance sheet?
    a.
    $7,000
    b.
    $4,000
    c.
    $13,000
    d.
    $10,000

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  • Author
    Replies
  • #813246
    Lou
    Participant

    Should be 13,000 if I'm not mistaken. 3,000 for the first note since its due within 12 months.

    10,000 from the 1st payment of 11 due within the 12 months.

    Bond sinking funds aren't a current liability because you it doesn't expire within the next 12 months

    FAR- taken 8/11/16....now the wait begins
    AUD- scheduled 9/8/16
    BEC- scheduled 10/9/16
    REG-scheduled 12/10/16

    Live a few years like most people won't, to live the rest of your life like most people can't.

    #813252
    pharaoh
    Participant

    Yes. 13,000

    FAR 8/2016
    AUD 1/2017
    REG TBD
    BEC TBD

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