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11 November, 15:19

At December 31, 2020, Wildhorse Company has outstanding three long-term debt issues. The first is a $1,810,000 note payable which matures June 30, 2023. The second is a $4,830,000 bond issue which matures September 30, 2024. The third is a $13,760,000 sinking fund debenture with annual sinking fund payments of $2,752,000 in each of the years 2022 through 2026. Prepare the required note disclosure for the long-term debt at December 31, 2020.

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  1. 11 November, 15:37
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    Answer and Explanation:

    The Preparation of note disclosure for the long-term debt is shown below:-

    Note disclosure for the long-term debt

    At the year end 31, December 2020

    Year Amount Working note

    2021 0

    2022 $2,752,000 From annual sinking fund payment

    2023 $4,562,000 ($1,810,000 annual sinking fund payment + $2,752,000 note payable maturity)

    2024 $7,582,000 ($4,830,000 annual sinking fund payment + $2,752,000 bond maturity)

    2025 $2,752,000 From annual sinking fund payment
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