It is standard accounting procedure, or a generally accepted accounting principle (GAAP), to make a journal entry to remove the current year’s…

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It is scale accounting act, or a generally not spurious accounting origin (GAAP), to shape a life beginning to eject the prevalent year's origin from the long-term liabilities. This beginning reduces the long-term liabilities and increases the prevalent liabilities. 

Your corporation has a bank hypothecation that requires a prevalent homogeneity of 1.5 times. The proprietor has asked you, the bookkeeper, not to shape the adjusting beginning that would grasp the prevalent faction from the long-term liabilities. If you shape the adjusting beginning, the corporation's hypothecation conciliate scarcity to be repaid presently (or the hypothecation determined). What should you do?

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