Question

BE5-9 (L03) Use the information presented in BE5-8 for Adams Company to prepare the long-term liabilities section of the balance sheet.

BE 8: Included in Adams Company’s December 31, 2017, trial balance are the following accounts: Accounts Payable \(220,000, Pension Liability \)375,000, Discount on Bonds Payable \(29,000, Unearned Rent Revenue \)41,000, Bonds Payable \(400,000, Salaries and Wages Payable \)27,000, Interest Payable \(12,000, and Income Taxes Payable \)29,000. Prepare the current liabilities section of the balance sheet.

Short answer

The long-term liabilities of the business entity total$746,000.

Step-by-step solution

Definition of Pension Liability

The account that reports the amount of money to be paid as pension in a future period is known as pension liability. Such liability is classified as non-current in nature.

Long-Term Liabilities Section

Particular	Amount $	Amount $
Pension Liability		$375,000
Bonds payable	$400,000
Less: Discount on bonds payable	(29,000)	371,000
Total long-term liabilities		$746,000