CHAPTER 14 LONG-TERM LIABILITIES
NOTES PAYABLE INTEREST = PRINCIPLE X RATE X TIME RATE = BASED ON ANNUAL RATE TIME = BASED ON PART OF OR MULTIPLE OF YEARS
NOTES PAYABLE LONG-TERM NOTES PAYABLE AND BONDS PAYABLE ARE BROKEN DOWN BETWEEN WHAT IS DUE TO BE PAID IN ONE YEAR OR LESS AND THE REMAINDER THAT IS TO BE PAID IN SUBSEQUENT YEARS. THE AMOUNT OF PRINCIPAL DUE IN ONE YEAR OR LESS IS REPORTED AS A CURRENT LIABILITY IN AN ACCOUNT ENTITLED CURRENT MATURITIES OF LONG-TERM DEBT. THE REMAINING PRINCIPAL BALANCE IS REPORTED AS LONG-TERM DEBT.
NOTES PAYABLE EACH PAYMENT CONTAINS AN AMOUNT OF PRINCIPLE AND INTEREST. MUST RUN AN AMORTIZATION SCHEDULE TO DETERMINE THESE AMOUNTS. EXAMPLE: PRINCIPAL AMOUNT: $20,000 TERM: 60 MONTHS (5 YEARS) RATE OF INTEREST: 6% PER ANNUM
NOTES PAYABLE YearPrincipalInterestTotal to be PaidBalance 20193,536.11 1,103.814,639.9216,463.89 20203,754.20885.724,639.9212,709.69 20213,985.76654.164,639.928,723.93 20224,231.59408.334,639.924,492.34 20234,492.34147.334,639.67-0- 20,000.003,199.3523,199.35
NOTES PAYABLE CASH20,000 CURRENT MATURITIES OF L/T DEBT3,536.11 LONG-TERM DEBT16,463.89
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