Explain how the notes payable would be reported on the balance sheet at the end of the first year.

Notes payable are reported as liabilities on the balance sheet. The portion of the note payable that is due within

three monthssix monthsone year

is reported as a

contra liabilitycurrent liabilitylong$-$term liability

$.$ The remaining portion of the note payable that is not due within one year is reported as a$($n$)$

adjusted to retained earningscurrent liabilitylong$-$term liability

$.$