Question

Presented here are long-term liability items for Splish Brothers Inc. at December 31, 2022. Bonds payable (due 2026) $720,000 Notes payable (due 2024) 72,000 Discount on bonds payable 37,000 Prepare the long-term liabilities section of the balance sheet for Splish Brothers Inc. SPLISH BROTHERS INC. Balance Sheet (Partial) choose the accounting period select an opening subsection name enter an account title $enter a dollar amount select between addition and deduction: enter an account title enter a dollar amount $enter a subtotal of the two previous amounts enter an account title enter a dollar amount select a closing subsection name $enter a total amount for this subsection

Answer 1

Total long-term liabilities = $755,000

Step-by-step explanation:

SPLISH BROTHERS INC

Balance Sheet (Partial) as at December 31, 2022

Details ($) ($)

Long-term Liabilities

Bond payable (due 2026) 720,000

Discount on bond payable (37,000) 683,000

Notes payable (due 2024) 72,000

Total long-term liabilities 755,000

Answer 2

SPLISH BROTHERS INC.

Balance Sheet (Partial)

Long-term Liabilities

Bonds Payable $720,000

Less:

Discount on bonds payable $37,000

$683,000

Notes payable $72,000

Total Long-term Liabilities $755,000

Step-by-step explanation:

Long term Liabilities are those liabilities which will be paid after more than one year time period.

Bonds are usually long term liabilities because of the long maturity period of e.g 5 years 10 years etc. In this question the bond have 4 years to maturity until 2026. Discount n the bond is an contra liability account which needs to be deducted from the face value of the bond to report the net payable value.

Note Payable is also classified as long term liability because it is usually payable after 1 years time period. In this question the Note will be due after 2 years time in 2024.