Keller Company issued a five-year interest-bearing note payable for $300,000 on January 1, 2019.Each January the company is required to pay $60,000 on the note.How will this note be reported on the December 31, 2020, balance sheet?
A)Long-term debt, $300,000
B)Long-term debt, $240,000
C)Long-term debt, $180,000; Long-term Debt due within one year, $60,000
D)Long-term debt of $240,000; Long-term Debt due within one year, $60,000

Question

Quizplus · Accepted Answer

The note payable is a long-term debt because it has a maturity date of more than one year. The balance of the note payable on December 31, 2020, is $180,000 ($300,000 - $60,000 x 2). The current portion of the note payable is $60,000, which is the amount due within one year.

Keller Company Issued a Five-Year Interest-Bearing Note Payable for $300,000