On January 5, 2012, Garrett Company, a calendar-year company, issued $500,000 of notes payable, of which $100,000 is due on January 1 for each of the next five years. The proper balance sheet presentation on December 31, 2012, is
A) Current Liabilities, $500,000.
B) Current Liabilities, $100,000; Long-term Debt, $400,000.
C) Long-term Debt, $500,000
D) Current Liabilities, $400,000; Long-term Debt, $100,000.

Question

Quizplus · Accepted Answer

The $100,000 due within the next year is classified as a current liability, while the remaining $400,000 is classified as long-term debt.

On January 5, 2012, Garrett Company, a Calendar-Year Company, Issued