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- Which of the following is classified as nonmonetary? a. Warranty liability b. Accrued expense c. Unamortized discount on bonds payable d. Refundable depositWhat best describes the discount on bonds payable account? A liability An asset A contra liability An expensell of the following are differences between IFRS and GAAP in accounting for liabilities except: a. When a bond is issued at a discount, GAAP records the discount in a separate contra liability account. IFRS records the bond net of the discount. b. Under IFRS, bond issuance costs reduce the carrying value of the debt. Under GAAP, these costs are recorded as an asset and amortized to expense over the terms of the bond. c. GAAP, but not IFRS, uses the term “troubled-debt restructurings.” d. GAAP, but not IFRS, uses the term “provisions” for contingent liabilities which are accrued
- Debt issuance costs are: Accounted for as a deduction from the equity balance on the balance sheet Recognized initially as a current liability on the balance sheet Amortized over the term of the related debt liability Expensed on the income statement when the transaction occurs Which one is the correct answer please?The following items are found in the financial statements.Indicate how each of these items should be classified in the financial statements. Classification (a) Discount on bonds payable. select a financial statement Balance SheetIncome statement (b) Interest expense (credit balance). select a financial statement Balance SheetIncome statement (c) Unamortized bond issue costs. select a financial statement Balance SheetIncome statement (d) Gain on repurchase of debt. select a financial statement Balance SheetIncome statement (e) Mortgage payable (payable in equal amounts over next 3 years). select a financial statement Balance SheetIncome statement…What is the treatment of transaction costs from issuance to a bond payable measured using the effective interest method? Ignored Added to the initial cost Same as discount Same as premium
- What type of account is Discount on Bonds Payable? What is its normal balance? Is it added to or subtracted from the Bonds Payable account to determine the carrying amount?A long-term liability should be reported as a current liability in a classified balance sheet if the long-term debt: A) Is callable by the creditor. B) Is secured by adequate collateral. C) Will be refinanced with stock. D) Will be refinanced with debt.How is periodic interest determined for outstanding liabilities? For outstanding receivables? How does the approach compare from one form of debt instrument (say bonds payable) to another (say notes payable)?
- What type of account is Discount on Bonds Payable, and what is its normal balance?a. Adjusting account; Creditb. Reversing account; Debitc. Contra liability account; Debitd. Contra liability account; Creditwhat is the required method of amortizing discount and premium on bonds payable? Explain the procedures.Gains on the redemption of bonds are reported in the Other Revenue section of the income statement. O Tre O False