Question

On November 1, 20X1, Chocolate Company issues $100,000, 6% interest bonds at face amount. Interest is payable on April 30 and October 31. On 12/31/X1, the company's balance sheet date, Chocolate should___________

Answer 1

On the company's balance sheet date, December 31, X1, Chocolate Company should classify the bonds payable as a long-term liability.

Step-by-step explanation:

On the balance sheet date, December 31, X1, Chocolate Company should classify the bonds payable on its balance sheet as a long-term liability. This is because the bonds have a maturity date that falls beyond one year from the balance sheet date. In this case, the bonds were issued on November 1, 20X1, and the interest payments are due on April 30 and October 31 of the following years. Therefore, the bonds would be recorded as a long-term liability on the company's balance sheet.