When a long-term note payable that requires annual instalment payments is initially recorded,it is first recorded as a long-term note payable.Then,at the same date,a second entry is made to reclassify the current portion.

Question

Quizplus · Accepted Answer

This is true, as the current portion of the long-term note payable is typically a shorter-term liability that is due within the next year and needs to be reclassified as a current liability on the balance sheet.

When a Long-Term Note Payable That Requires Annual Instalment Payments