This continues the Fitness Equipment Doctor, Inc., example from the Continuing Problem in Chapter 8. Fitness Equipment

Question:

This continues the Fitness Equipment Doctor, Inc., example from the Continuing Problem in Chapter 8. Fitness Equipment Doctor, Inc., purchased some of its long-term assets during 2016 using long-term debt. The following table summarizes the nature of this long-term debt. Assume the fiscal year ends on December 31.

Annual Interest Item Note payable Amount Payment Terms Date Mar 18 Rate 8% $35,800 Four equal annual payments of princip

Requirements

1. Calculate the interest expense that Fitness Equipment Doctor, Inc., should accrue as of December 31, 2016. Round your answer to the nearest dollar. Use 365 days for the note payable (ignore leap year).

2. Prepare the balance sheet presentation at December 31, 2016, for all long-term debt indicating the portion that should be classified as current and the portion that should be classified as long-term?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Financial Accounting

ISBN: 978-0134436111

4th edition

Authors: Robert Kemp, Jeffrey Waybright

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