On December 31, 2025, McDaniel Company had $1,200,000 of short-term debt in the form of notes payable due February 2, 2026. On January 21, 2026, the company issued 25,000 shares of its common stock for $38 per share, receiving $950,000 proceeds after brokerage fees and other costs of issuance. On February 2, 2026, the proceeds from the stock sale, supplemented by an additional $250,000 cash, are used to liquidate the $1,200,000 debt. The December 31, 2025, balance sheet is issued on February 23, 2026.

Instructions

Show how the $1,200,000 of short-term debt should be presented on the December 31, 2025, balance sheet, including note disclosure.