On December 31, 2017, Indiglow Company has a five-year note payable of $450,000. Of that balance, $90,000 will be paid within one year from the balance sheet date. How much of the note payable should Indiglow Company report as a long term liability when they prepare the December 31, 2017 statement of financial position?
A) $360,000
B) $450,000
C) $90,000
D) $540,000

Question

Quizplus · Accepted Answer

The portion of the note payable that will not be paid within one year from the balance sheet date is $450,000 - $90,000 = $360,000. Therefore, Indiglow Company should report $360,000 as a long-term liability.

On December 31, 2017, Indiglow Company Has a Five-Year Note