Reporting Liabilities and Related Disclosures

I’m working on a Accounting question and need guidance to help me study.

Part 1

For this discussion, first read Judgment Case 13-9 in your book. Then, describe how the situation would be reported in the annual reports (footnote disclosure and/or journal entry). Explain your answer. What is the proper accounting treatment and required disclosures for long-term liabilities?

Part 2

For this discussion, imagine you are the controller of a growing new company and are discussing financing options with the Vice President of Finance. Would you want to finance with notes payable (a bank loan) or with bonds? Which option would you recommend? Justify your reasoning.