On December 31,2015,Peligrino Co.has a long term note payable of $800,000.Of that balance,$100,000 will be paid within one year from the balance sheet date.How much of the note payable should Peligrino Co.report as a long term liability when they prepare the December 31,2015 balance sheet?

Question

Quizplus · Accepted Answer

Since only $100,000 of the note payable will be paid within one year, the remaining $700,000 will be considered a long term liability and should be reported as such on the balance sheet. Therefore, Peligrino Co. should report $700,000 as a long term liability on their December 31, 2015 balance sheet.