What is the amount of long-term liabilities

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Reference no: EM133433605

Question: On November 1, Year 6, Bob the Builder purchases a lottery ticket after having a dream in which a stranger gave him a giant fortune cookie. A week later, he finds out that he won $100,000. On December 1, Year 6, he cashes in his lottery ticket and forms a corporation called Fortune Cookie Inc. (FCI, hereafter) with his lottery money. When FCI is formed, there is no other assets or liabilities. From the formation of FCI to the end of Year 10, the following transaction is the only transaction that has happened:

FCI issues an installment note on August 1, Year 7 (with a required yield of 6%) in exchange for the land that it purchases from Mr. Mac. Mr. Mac's real estate agent had listed the land on the market for 135000. The note calls for three equal blended payments of 45000. that are to be made at August 1, Year 8, Year 9, and Year 10. Note that FCI's fiscal year end is December 31.

What is the amount of long-term liabilities that should be reported on December 31, Year 8 Statement of Financial Position?

Reference no: EM133433605

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