On January 2, 2010 , Lester Company, a calendar-year company, issued $40,000 of notes payable, of which $10,000 is due on January 2 for each of the next four years. The proper balance sheet presentation on December 31, 2010 7, is

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The portion of the notes payable due within the next year ($10,000) should be classified as current liabilities, while the remaining $30,000 should be classified as long-term liabilities. Therefore, the proper balance sheet presentation on December 31, 2010, should be Current Liabilities of $10,000 and Long-Term Liabilities of $30,000, for a total Notes Payable amount of $40,000.

On January 2, 2010 , Lester Company, a Calendar-Year Company