Question

On December 31, 2021 Sun Devils Company has outstanding bonds payable with a face value of $700,000, discount on bonds payable of $60,000, and interest payable of $15,000. The bonds mature on January 1, 2025, and interest is payable on a semi-annual basis. What amounts will be reported in the current liabilities section and long-term liabilities section of the balance sheet for these bonds

Answer 1

Answer:

current liabilities = $75,000

long-term liabilities = $700,000

Explanation:

Current liabilities includes a company`s obligation due for payment within a period of 12 months and long-term liabilities are company's obligation due for payment for period exceeding 12 months.