On December $31,2023,$ Hornsby Corporation had $$1\mathrm{.}2$ million of short$-$term debt in the form of notes payable due on February $2,2024.$ On January $21,2024,$ to ensure that it had sufficient funds to pay for the short$-$term debt when it matured, Hornsby issued $25,000$ common shares for $$38$ per share, receiving $$950,000$ in proceeds after brokerage fees and other costs of issuance. On February $2,2024,$ the proceeds from the sale of the shares, along with an additional $$250,000$ cash, were used to liquidate the $$1\mathrm{.}2-$million debt. The December $31,2023$ balance sheet is issued on February $23,2024.$

Instructions

Assuming that Hornsby follows ASPE, show how the $$1\mathrm{.}2$ million of short$-$term debt should be presented on the December $31,2023$ balance sheet, including the note disclosure.

Assuming that Hornsby follows IFRS, explain how the $$1\mathrm{.}2$ million of short$-$term debt should be presented on the December $31,2023$ SFP$.$

An icon reads, Digging Deeper. Considering only the effect of the $$1\mathrm{.}2$ million of short$-$term notes payable, would Hornsby$$s current ratio appear higher if Hornsby followed ASPE or if Hornsby followed IFRS? Discuss your answer from a creditor$$s perspective.