Current-noncurrent classification of debt


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Current-noncurrent classification of debt 1 answer below » The balance sheet at December 31, 2013, for Nevada Harvester Corporation includes the liabilities listed below: a. 11% bonda with a face amount of $40 million were issued for $40 million on October 31, 2004. The bonds mature on October 31, 2024. Bondholders have the
option of calling (demanding payment on) the bonds on October 31, 2014, at a redemption price of $40 million. Market conditions are such that the call is not
expected to be exercised. b. Management intended to refinance $6 million of its 10% notes that mature in May 2014. In early March, prior to the actual issuance View complete question » The balance sheet at December 31, 2013, for Nevada Harvester Corporation includes the liabilities listed below: a. 11% bonda with a face amount of $40 million were issued for $40 million on October 31, 2004. The bonds mature on October 31, 2024. Bondholders have the
option of calling (demanding payment on) the bonds on October 31, 2014, at a redemption price of $40 million. Market conditions are such that the call is not
expected to be exercised. b. Management intended to refinance $6 million of its 10% notes that mature in May 2014. In early March, prior to the actual issuance of the 2013 financial
statements, Nevada Harvester negotiated a line of credit with a commercial bank for up to $5 million any time during 2014. Any borrowings will mature two years
from the date of borrowing. c. Noncallable 12% bonds with a face amount of $20 million were issued for $20 million on September 30, 1988. The bonds mature on September 30, 2014.
Sufficient cash is expected to be available to reture the bonds at maturity. d. A $12 million 9% bank loan is payable on October 31, 2019. The bank has the right to demand payment after any fiscal year-end in which Nevada Harvester’s
ratio of current assets to current liabilities falls below a contractual minimum of 1.7 to 1 and remains so for six months. The ratio was 1.45 on December 31,
2013, due primarily to an intentional temporary decline in inventory levels. Normal inventory levels will be reestablished during the first quarter of 2014. 1. Prepare the liability section of a classified balance sheet and any necessary footnote disclosure for Nevada Harvester at December 21, 2013. Accounts
payable and accruals are $22 million. View less » Dec 06 2013 04:09 PM

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