Q11SE Preparing the liabilities sectio... [FREE SOLUTION]

Chapter 12: Q11SE (page 657)

Preparing the liabilities section of the balance sheet
Luxury Suites Hotels includes the following selected accounts in its general ledger at
December 31, 2018:
Notes Payable (long-term) $ 200,000 Accounts Payable $ 33,000
Bonds Payable (due 2022) 450,000 Discount on Bonds Payable 13,500
Interest Payable (due next year) 1,000 Salaries Payable 2,600
Estimated Warranty Payable 1,300 Sales Tax Payable 400
Prepare the liabilities section of Luxury Suites鈥檚 balance sheet at December 31, 2018.

Expert verified

The total of the liabilities side of the balance sheet is $474,800.

Interest payable is the interest that is due but not paid.

Luxury Suites
Balance Sheet
as of December 31, 2018
Current Liabilities:
Accounts Payable	$33,000
Interest Payable	$1,000
Salaries Payable	$2,600
Sales Tax Payable	$400
Estimated Warranty Payable	$1,300
Total Current Liabilities		$38,300

Long-term Liabilities:
Notes Payable	$200,000
Bonds Payable	$450,000
Less: Discount on Bonds Payable	($13,500)
Total Long-Term Liabilities		$436,500

Total Liabilities		$474,800

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