Presented below are four different situations related to Mckee plc debt obligations. Mckee's next financial reporting date
Question:
1. Mckee has a debt obligation maturing on December 31, 2021. The debt is callable on demand by the lender at any time.
2. Mckee also has a long-term obligation due on December 1, 2020. On November 10, 2018, it breaches a covenant on its debt obligation and the loan becomes due on demand. An agreement is reached to provide a waiver of the breach on December 8, 2018.
3. Mckee has a long-term obligation of £400,000, which is maturing over 4 years in the amount of £100,000 per year. The obligation is dated November 1, 2018, and the first maturity date is November 1, 2019.
4. Mckee has a short-term obligation due February 15, 2019. Its lender agrees to extend the maturity date of this loan to February 15, 2021. The agreement for extension is signed on January 15, 2019.
Instructions
Indicate how each of these debt obligations is reported on Mckee's statement of financial position on December 31, 2018.
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
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Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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