Question 8 - Intermediate Accounting (Kieso)

Question

BE5-8 (L03) Included in Adams Company’s December 31, 2017, trial balance are the following accounts: Accounts Payable \(220,000, Pension Liability \)375,000, Discount on Bonds Payable \(29,000, Unearned Rent Revenue \)41,000, Bonds Payable \(400,000, Salaries and Wages Payable \)27,000, Interest Payable \(12,000, and Income Taxes Payable \)29,000. Prepare the current liabilities section of the balance sheet.

Step-by-Step Solution

Answer

The current liabilities of the business entity total $329,000.

Definition of Discount on Bonds Payable

Discount on bonds payable can be defined as the difference in the value at which bonds are issued and their par value. It is reduced from the value of bonds in the balance sheet.

Current Liabilities Section

Particular	Amount $
Accounts payable	$220,000
Unearned rent revenue	41,000
Salaries and wages payable	27,000
Interest payable	12,000
Income tax payable	29,000
Current Liabilities	$329,000