Brad & Kelly Company has borrowed $100,000 from the bank to be repaid over the next five
Question:
Brad & Kelly Company has borrowed $100,000 from the bank to be repaid over the next five years, with payments beginning next month. Which of the following best describes the presentation of this debt in the balance sheet as of today (the date of borrowing)?
a. $100,000 in the Long-Term Liability section.
b. $100,000 plus the interest to be paid over the five-year period in the Long-Term Liability section.
c. A portion of the $100,000 in the Current Liability section and the remainder of the principal in the Long-Term Liability section.
d. A portion of the $100,000 plus interest in the Current Liability section and the remainder of the principal plus interest in the Long-Term Liability section.
Step by Step Answer:
Financial Accounting
ISBN: 9781264229734
11th Edition
Authors: Robert Libby, Patricia Libby, Frank Hodge