On 1 July 2013, Avery Services issued a 4% long- term note payable for $10 000. It is payable over a 5- year term in $2 000 principal instalments on 1 July of each year. Each yearly instalment will include both principal repayment of $2 000 and interest payment for the preceding one- year period. On 1 July 2014, after the first instalment payment is made, Avery will have to reclassify an additional $2 000 from long- term notes payable to the current portion of long- term notes payable.

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The Answer of On 1 July 2013, Avery Services issued a 4% long- term note payable for $10 000. It is payable over a 5- year term in $2 000 principal instalments on 1 July of each year. Each yearly instalment will include both principal repayment of $2 000 and interest payment for the preceding one- year period. On 1 July 2014, after the first instalment payment is made, Avery will have to reclassify an additional $2 000 from long- term notes payable to the current portion of long- term notes payable.

On 1 July 2013, Avery Services Issued a 4% Long-