On January 1, 2020, Keisler Company, a calendar-year company, issued $900,000 of notes payable, of which $225,000 is due on January 1 for each of the next four years.The proper balance sheet presentation on December 31, 2020 is
A)Current liabilities, $900,000.
B)Long-term debt, $900,000.
C)Current liabilities, $225,000; Long-term Debt, $675,000.
D)Current liabilities, $675,000; Long-term Debt, $225,000.

Question

Quizplus · Accepted Answer

On December 31, 2020, $225,000 of the notes payable is due within the next year, so it should be classified as a current liability. The remaining $675,000 is due in subsequent years and should be classified as long-term debt.

On January 1, 2020, Keisler Company, a Calendar-Year Company, Issued