Hilton Company issued a 4-year interest-bearing note payable for $600,000 on January 1, 2020.Each January, the company is required to pay $150,000 on the note.How will this note be reported on the December 31, 2021 balance sheet?

Question

Quizplus · Accepted Answer

The note is a long-term debt because it has a maturity of more than one year. The portion of the note that is due within one year is a current liability. As of December 31, 2021, two years have passed since the note was issued, so $300,000 of the note is long-term debt and $150,000 is current liability.

Hilton Company Issued a 4-Year Interest-Bearing Note Payable for $600,000