On 1 November 2013, EZ Products borrowed $48 000 on a 5%, 10- year note with annual instalment payments of $4 800 plus interest due on 1 November of each succeeding year. How will the note be shown on the balance sheet dated 31 December 2013?
A)$4 800 shown as current liability, $48 000 shown as non- current liability
B)$48 000 shown as current liability only
C)Entire $48 000 shown as non- current liability
D)$4 800 shown as current liability, $43 200 shown as non- current liability

Question

Quizplus · Accepted Answer

The $4,800 is the portion of the note due within the next year, making it a current liability. The remaining $43,200 is due in subsequent years, making it a non-current liability.

On 1 November 2013, EZ Products Borrowed $48 000 on a 5