On December 31, 2014, Zimmer Corporation has $7.9 million of short-term debt in the form of notes payable that will be due periodically in 2015 to Provincial Bank. On January 28, 2015, Zimmer enters into a refinancing agreement with the bank that will permit it to borrow up to 60% of the gross amount of its accounts receivable. Receivables are expected to range between a low of $5.7 million in May and a high of $7 million in October during the year 2015. The interest cost of the maturing short-term debt is 15%, and the new agreement calls for a fluctuating interest rate at 1% above the prime rate on notes due in 2016. Zimmer's December 31, 2014 balance sheet is issued on February 15, 2015.
Instructions
(a) Assuming that Zimmer follows ASPE, prepare a partial balance sheet for Zimmer Corporation at December 31, 2014, that shows how its $7.9 million of short-term debt should be presented, including any necessary note disclosures.
(b) Assuming that Zimmer follows IFRS, explain how the $7.9 million of short-term debt should be presented on the December 31, 2014 statement of financial position.