Disclosure of Debt On May 1, 2019, Ramden Company issues 13% bonds with a face value of $2 million. The bond contract calls for retirement of the bonds in periodic installments of $200,000, starting on May 1, 2020, and continuing on each May 1 thereafter until all bonds are retired.
How would the preceding information appear in Ramden’s balance sheets on December 31, 2019, and 2020?
Explain the manner by which the given information will appear on the Company R’s balance sheet on December 31, 2019 and 2020.
This financial statement reports a company’s resources (assets) and claims of creditors (liabilities) and stockholders (stockholders’ equity) over those resources. The resources of the company are assets which include money contributed by stockholders and creditors. Hence, the main elements of the balance sheet are assets, liabilities, and stockholders’ equity.
|Partial Balance Sheet|