Muffin Company issued a five-year, interest-bearing note payable for $ 50,000 on January 1, 2021. Each January the company is required to pay $ 10,000 on the note. How will this note be reported on the December 31, 2022, balance sheet?
A) Long-term debt, $ 50,000
B) Long-term debt, $ 40,000
C) Long-term debt, $ 30,000; Long-term debt due within one year, $ 10,000
D) Long-term debt of $ 40,000; Long-term debt due within one year, $ 10,000

Question

Quizplus · Accepted Answer

By December 31, 2022, $20,000 has been paid, leaving $30,000 as long-term debt. The next $10,000 due within one year is classified separately.

Muffin Company Issued a Five-Year, Interest-Bearing Note Payable for