Hi! Please only choose the correct answer. see the pictures attached Statement I- A long-term debt that is due to be settled within twelve monthsafter the end of the reporting period is classified as noncurrent when anagreement to refinance or reschedule payment on a long-term basis iscompleted after the end of the reporting period and before the financialstatements are authorized for issueStatement II - When an entity breaches a covenant under a long-term loanagreement on or before the end of the reporting period with the effect that theliability becomes payable on demand, the liability is classified noncurrent whenthe lender agreed on or before the end of reporting period to provide a graceperiod at least twelve months after that datea. Only statement I is correctb. Only statement Il is correctc. Both statements are correctd. Both statements are incorrect

Long term debts can be defined as those financial obligation to be paid off by the business. It is…

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Business

Accounting

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Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 1C

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Before the end of the reporting period, MetaFace Company breaches a covenant under a long-term loan agreement with BookWorm Bank. The loan will be classified as _______________. CURRENT, provided BookWorm gives MetaFace, before the end of the reporting period, a grace period ending at least twelve months after the reporting period CURRENT, since the loan will be payable on demand NONCURRENT, provided BookWorm gives MetaFace, after the end of the reporting period but before issuance of financial statements, agreed not to demand payment even a breach has been made NONCURRENT, since MetaFace will plan to make up with the consequences of the breach of loan contract
9. Which of the following items would be excluded from current liabilities? Group of answer choices a. Normal accounts payable which had been assigned by the creditor to a finance company. b. Long-term debt callable within one year or less because the debtor violated a debt provision. c. A short-term debt which at the discretion of the entity can be rolled over at least twelve months after the balance sheet date. d. A long-term liability callable or due on demand by the creditor even though the creditor have given no indication that the debt will be called.
In the case of the notes payable due to bank, supposing the entity has the discretion to refinance the obligation for at least 12 months after the given maturity date, as seen in its loan agreement,A. Compute for the current liabilities as of December 31, 2021.B. Compute for the non-current liabilities as of December 31, 2021.
IFRS rules for reclassification of short-term debt are similar to U.S. GAAP except the short-term debt refinancing must occur ________. Group of answer choices at any time before the financial statements are issued by the balance sheet date by the balance sheet date unless the company has an existing arrangement before the end of the year-end
In the case of the notes payable due to bank, supposing the entity has the discretion to refinance theobligation for at least 12 months after the given maturity date, as seen in its loan agreement,A. Compute for the current liabilities as of December 31, 2021.B. Compute for the non-current liabilities as of December 31, 2021.
On January 1, 20x1, an entity obtains an 11%, ₱5,000,000 bank loan. The bank charges the entity an 8.74% nonrefundable loan origination fee. The principal on the loan matures on December 31, 20x4 but interest is due annually every December 31. Requirements: Compute for the initial carrying amount of the loan. Compute for the effective interest rate on the loan. Compute for the carrying amount of the loan on December 31, 20x1.
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Which obligation are classified as current even if they are due to be settled after more than twelve months from balance sheet date? * Notes payable – non-trade Bank overdrafts Dividends payablE Trade payables and accruals from operations
1. A company is insolvent when Select one: a.it is in default on one-third or more of its outstanding debt obligations. b.it is unable to pay debts within 90 days following the close of the company's reporting year, whether such year is a calendar or fiscal year. c.it is unable to pay debts as the obligations come due. d.it is more likely than not that it will not be able to pay debts within a reasonable period of time following the date such obligations become due. e.it is unable to timely remit payments on more than two-thirds of its outstanding obligations measured on a rolling three-month basis. 2.The statement of financial affairs is prepared Select one: a.in order to bring clarity to the "liquidate or reorganize" decision. b.under the assumption that liquidation will occur. c.Under the going concern assumption. d.as the final statement produced in any liquidation or reorganization scenario. e.Both a) and b) are correct. 3. A Chapter 7 bankruptcy is a(n)…
Assume that the business has received notification on 15 April 2020 that a debtor owing $1,850 has declared bankruptcy. On 22 August 2020 the debtor unexpectedly remits full payment for the previously written-off account. Prepare the general journal entry to re-establish this debt and record payment under each of the following methods: (i) The direct write-off method (ii) The allowance method
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Which of the following is a current liability? Bond payable due in two years for which there is an adequate sinking fund. Bond payable due in three years expected to be refinanced. Bond payable due in eleven months for which there is an appropriation of retained earnings. Bond payable due in eight months and refinanced on a long-term basis at the end of reporting period.