At the beginning of the year, Shinedown Corporation had a long-term debt balance of $46,255. During the year, the company repaid a long-term loan in the amount of $11,930. The company paid $4,415 in interest during the year, and opened a new long-term loan for $10,565. How much is the ending long-term debt account on the company's balance sheet?
To calculate the ending long-term debt balance, we'll start with the beginning balance, add any new long-term debt issued during the year, subtract any long-term debt repaid, and then adjust for the interest paid (since interest is an expense and not a reduction in the debt balance).
Starting Long-Term Debt Balance: $46,255 Less: Repayment of Long-Term Loan: (-)$11,930 Add: New Long-Term Loan Issued: +$10,565 Less: Interest Paid (not a reduction in the debt balance): (-)$4,415
Ending Long-Term Debt Balance = $46,255 - $11,930 + $10,565 - $4,415 Ending Long-Term Debt Balance = $41,380
So, the ending long-term debt account on the company's balance sheet would be $41,380.
