Disclosure of notes payable in financial statements.
a. At December 31, 2007 Reed Corp owed notes payable of $1,000,000 with the maturity date of April 30, 2008, these notes didn't arise from transactions in the normal course of business. On February1, 2008, Reed issued $3,000,000 of 10 year bonds with the intention of using part of the bond proceeds to liquidate the $1,000,000 of notes payable. Reeds December 31, 2007, financial statements were issued on March 29. How much of the $1,000,000 notes payable should be classified as current in Reeds balance sheet at December, 2007?
b. On June 30, 2007, country inc had outstanding 10 percent,$1,000,000 face amount, 15 year bonds maturing on June 30, 2012. Interest is paid on June 30 and December 31 and bond discount and bond issue costs are amortized on these dates. The unamortized balances on June 30, 2007 of bond discount and bond issue costs were $55,000 and $20,000 respectively. Country reacquired all of these bonds at 96 on June 30, 2007, and retired them. Ignoring income taxes, how much gain/loss should country record on the bond retirement.