Stardust Company issued a five-year, interest-bearing note payable for $50,000 on January 1, 2019. Each January, Stardust is required to pay $10,000 principal on the note. What is the amount that will be reported on the current portion of long-term notes payable on the December 31, 2020 balance sheet?

Question

Quizplus · Accepted Answer

The current portion of long-term notes payable refers to the amount that is due within the next year. As of December 31, 2020, Stardust would be required to pay $10,000 in January 2021, making $10,000 the correct current portion.

Stardust Company Issued a Five-Year, Interest-Bearing Note Payable for $50,000