Long-term obligations usually are reclassified and reported as current liabilities when they become payable within the upcoming year (or operating cycle, if longer than a year). So, a 25-year bond issue is reported as a long-term liability for 24 years but normally is reported as a current liability on the balance sheet prepared during the 25th year of its term to maturity. Name a situation in which this would not be the case.
Answer to relevant QuestionsHow do IFRS and U.S. GAAP differ with respect to the classification of debt that is expected to be refinanced?Name two loss contingencies that almost always are accrued.On October 1, Eder Fabrication borrowed $60 million and issued a nine-month promissory note. Interest was discounted at issuance at a 12% discount rate. Prepare the journal entry for the issuance of the note and the ...Consultants notified management of Goo Goo Baby Products that a crib toy poses a potential health hazard. Counsel indicated that a product recall is probable and is estimated to cost the company $5.5 million. How will this ...On January 1, 2011, Poplar Fabricators Corporation agreed to grant its employees two weeks’ vacation each year, with the stipulation that vacations earned each year can be taken the following year. For the year ended ...
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