Question

At the beginning of the year, Shinedown, Corp., had a long-term debt balance of $46,880. During the year, the company repaid a long-term loan in the amount of $12,805. The company paid $4,890 in interest during the year, and opened a new long-term loan for $11,290. How much is the ending long-term debt account on the company's balance sheet

Answer 1

Shinedown, Corp.

The ending long-term debt account on the company's balance sheet is:

= $45,365.

Step-by-step explanation:

a) Data and Calculations:

Beginning long-term debt balance = $46,880

Repayment of a long-term loan = (12,805)

New long-term loan opened = 11,290

Ending balance of long-term debt = $45,365

Interest payment during the year = $4,890

b) The long-term debt account does not include the interest payment during the year. If any interest is not paid, the amount will be taken as a current liability and not a long-term debt.