Assignments from the Readings
Gilbert R. Carrasco
ACC/400
May 15, 2014
Florentino Lopez

Assignments from the Readings
Chapter 10 1) Georgia Lazenby believes a current liability is a debt that can be expected to be paid in one year. Is Georgia correct? Explain.
Georgia is correct, current liabilities are defined as the obligations due to be paid or settled by the company in one year or during the current operating cycle, whichever time period is longer determines the method. For example, an installment loan from a bank to be paid in one year will fall under current liabilities. Another example is employee slaveries.
7a) What are long-term liabilities? Give two examples.
(b) What is a bond?
7a- Long-term liabilities for a company, are paid in a time frame which exceeds more than one year or current operating cycle. For example, tax payments, mortgage payments and long-term notes are long-term liabilities. b- “Bonds are a form of interest-bearing note payable issued by corporations, universities, and governmental agencies. Bonds, like common stock, are sold in small denominations (usually $1,000 or multiples of $1,000) (Kimmel, 2007).”
8) Contrast these types of bonds:
(a) Secure and unsecured
(b) Convertible and callable
(a) A secured bond is backed by collateral in the form physical assets or money. The collateral is given to the bond issuer in case the buyer defaults payment. These type of bonds are considered safe and not a liability to a company’s assets. For example, a mortgage payment is a secured bond. Mortgage payments have real estate property as collateral. Unsecured bonds are not backed by any money or type of collateral. This makes these types of bounds more risky than a secured bond. This type of bond relies on the borrowers promise to pay and is issued based on the borrower’s credit standing. “For example, in a recent