If a mortgage equals $100,000 and the first principal payment of $10,000 is due to be paid 18 months after the loan is made, the amount recorded as a current liability on the balance sheet prepared at the loan origination would be $0.

Question

Quizplus · Accepted Answer

At the time of loan origination, since the first principal payment is not due within the next 12 months, it would not be classified as a current liability but rather as a long-term liability on the balance sheet.

If a Mortgage Equals $100,000 and the First Principal Payment