On January 2,2013,Chester Company,a calendar-year company,issued $80,000 of notes payable,of which $20,000 is due on January 2 for each of the next four years.The proper balance sheet presentation on December 31,2013,is

Question

Quizplus · Accepted Answer

The portion of the notes payable that is due within one year (i.e. the $20,000 due on January 2, 2014) should be classified as current liabilities. The remaining $60,000 ($20,000 x 3) should be classified as long-term liabilities. Therefore, the proper balance sheet presentation on December 31, 2013, should show current liabilities of $20,000 and long-term liabilities of $60,000, for a total notes payable of $80,000. Choice B is the only option that reflects this classification.

On January 2,2013,Chester Company,a Calendar-Year Company,issued $80,000 of Notes Payable,of