Problem #2: (10 points ) The adjusted trial balance for Holly Corporation at the
ID: 2504477 • Letter: P
Question
Problem #2: (10 points)
The adjusted trial balance for Holly Corporation at the end of 2014 contained the following accounts:
Bonds payable, 10% $700,000
Interest payable 20,000
Discount on bonds payable 40,000
Lease liability 50,000
Mortgage notes payable, 9%, due 2017 90,000
Accounts payable 120,000
Instructions
(a) Prepare the long-term liabilities section of the balance sheet.
(b) Indicate the proper balance sheet classification for the accounts listed above that do not belong in the long-term liabilities section.
Explanation / Answer
long-term liabilities:
Mortgage notes payable, 9%, due 2017 90,000
Bonds payable, 10% $700,000
Lease liability 50,000
current liabilities:
Interest payable 20,000
Discount on bonds payable 40,000
Accounts payable 120,000
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