Question

Suppose a business receives a $453,000 long-term bank loan on December 31, 2019. The borrowing arrangement...

Suppose a business receives a $453,000 long-term bank loan on December 31, 2019. The borrowing arrangement requires the business to pay $113,250 by September 2020. Show how the business will report both current and long-term liabilities on its December 31, 2019 balance sheet.

Do not enter dollar signs or commas in the input boxes.

Current Liabilities:
Bank Loan, Current Portion Answer
Long-Term Liabilities:
Bank Loan, Long-Term Portion Answer

Homework Answers

Answer #1

Long term debt is debt with a maturity of longer than one year. The current portion of long-term debt is a amount of principal that will be due for payment within one year of the balance sheet date. It is stated in a separate line item in the balance sheet.

Total long term loan                = 453000

Current Liabilities:

Bank Loan, Current Portion = 113250

Long-Term Liabilities:

Bank Loan, Long-Term Portion = 339750

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