3 From the following prepare the longterm liabilities sectio

3. From the following, prepare the long-term liabilities section of a balance sheet:

a. Sinking Fund $275,000

b. Premium on 13% bonds 7,000

c. Discount on 16% bonds 13,000

d. 13% Bonds Payable 600,000

e. 16% Bonds Payable 180,000

Solution

Balance Sheet (Partial) Liabilities Long-Term Liabilities 13% Bonds Payable    600,000.00 Premium on 13% Bonds        7,000.00    607,000.00 16% Bonds Payable    180,000.00 Discount on 16% Bonds    (13,000.00)    167,000.00 Total Long-Term Liabilities    774,000.00 Sinking Fund - is reported is immediately after the Current Assets Section of the Balance Sheet. The sinking fund is the fund used for the retiring of bonds.