On January 1, 2021, Howard 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, 2021, is

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Since $225,000 is due within one year, it should be classified as a current liability. The remaining $675,000 is due in more than one year, so it should be classified as long-term debt. Therefore, the proper balance sheet presentation on December 31, 2021, is current liabilities of $225,000 and long-term debt of $675,000, for a total of $900,000.

On January 1, 2021, Howard Company, a Calendar-Year Company, Issued