This continues the Aqua Elite, Inc. example from the Continuing Problem in Chapter 8. Aqua Elite, Inc. purchased some of its fixed assets during 2014 using long-term debt. The following table summarizes the nature of this long-term debt.

Requirements
1. Calculate the interest expense that Aqua Elite, Inc. should accrue as of December 31, 2014.
2. Prepare the balance sheet presentation for all long-term debt indicating the portion that should be classified as current and the portion that should be classified as long-term.

Transcribed Image Text:

Annual Interest Date Item Rate Amount Payment Terms May 18 Note payable 890 | $31,000 | Five equal annual payments of principal plus accrued interest are due on May 18 of each year | Mortgage payable | 690 | $85,000 | Semiannual payments of $3,677 due on March 1 and September 1 of each year. Sep 1