On January 1 2017 Key Company a calendar-year company issued $250000 of notes payable of which $62500 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31 2017 is
A) Current Liabilities $250000.
B) Long-term Debt $250000.
C) Current Liabilities $62500; Long-term Debt $187500.
D) Current Liabilities $187500; Long-term Debt $62500.

Question

Quizplus · Accepted Answer

The portion of the notes payable due within one year (January 1, 2018) should be classified as current liabilities ($62,500). The remaining portion ($187,500) should be classified as long-term debt. Therefore, the proper balance sheet presentation on December 31, 2017 should show Current Liabilities of $62,500 and Long-Term Debt of $187,500.

On January 1 2017 Key Company a Calendar-Year Company Issued