The accounting records of Pacer Foods Inc. include the following items at December 31, 2014.

Requirements
1. Show how each relevant item would be reported on the Pacer Foods Inc. classified balance sheet, including headings and totals for current liabilities and long-term liabilities.
2. Answer the following questions about Pacer's financial position at December 31, 2014:
a. What is the carrying amount of the bonds payable? (Combine the current and long-term amounts.)
b. Why is the interest-payable amount so much less than the amount of interest expense?
3. How many times did Pacer cover its interest expense during 2014?

Transcribed Image Text:

Mortgage note payable, Accumulated depreciation, 50,000 490,000 equipment current $219,000 Bonds payable, long-term. Mortgage note payable, Discount on bonds payable (all long-term) long-term Bonds payable, current portion Interest expense 150,000 Operating income 70,000 Equipment 67,000 Interest payable.. 7,000 291,000 487,000 9,000 . . . .