On March 1,2018,Barker Services issued a 5% long-term notes payable for $21,000.It is payable over a 3-year term in $7000 annual principal payments on March 1 of each year plus interest,beginning March 1,2019.How will the notes payable be shown on the balance sheet dated December 31,2018?
A) $21,000 shown as current liability only
B) $7000 shown as current liability and $21,000 shown as long-term liability
C) $7000 shown as current liability and $14,000 shown as long-term liability
D) the entire $21,000 shown as long-term liability

Question

Quizplus · Accepted Answer

On December 31, 2018, the balance sheet will show $7,000 as a current liability, which is the portion due within the next year, and $14,000 as a long-term liability, which is the portion due after more than one year.

On March 1,2018,Barker Services Issued a 5% Long-Term Notes Payable