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Chapter 12 Long-Term Liabilities Directed Reading Guide LO1. How are long-term notes payable and mortgages payable accounted for? a) In your own words, what is a long-term liability? bi To record the purchase of a building for S150,000, paying $100,000 in cash and signing a 30-year mortgage at 6% for the balance, the nal entry would be: Loz What are bonds? a) In your own words, what is a bonds payable? are unsecured bonds backed only by the credit b) worthiness of the bond issuer. are bonds that give bondholders the right to take c) specified assets of the issuer if the issuer fails to pay principal or interest. are bonds that mature in installments at regular intervals. are bonds that mature all at the same time c) Lo3. How are bonds payable accounted for using the straight-line amortization method? Journalize the following: nA bond that has a face value of $100,000 but is issued for 95,000. n A bond that has a face value of $100,000 but is issued for $106,000. LO4 How is the retirement of bonds payable accounted for? a When a bonds payable is retired at maturity, the journal entry is a and a credit to- debit to