Mackey Company has a 5-year mortgage for $100,000 which requires 5 equal payments of principal plus interest.In the first year of the mortgage,Mackey will report this liability as a:

Question

Quizplus · Accepted Answer

The portion of the mortgage that is due within the next year is classified as a current liability, while the remaining balance is classified as a long-term liability. Since the mortgage is paid in equal installments over 5 years, $20,000 is due in the first year, making it a current liability, and the remaining $80,000 is a long-term liability.

Mackey Company Has a 5-Year Mortgage for $100,000 Which Requires