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When would a note receivable become a long-term asset and why?

When would a note receivable become a long-term asset and why?

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Answer #1

Note receivable becomes a long term assets when they are due after one year on the record date of balance sheet. For eg. we are preparing the balance for the year ended December 2019, so note receivable due after 31 december 2020, that is after 1 year will be classified as long term assets. Since the assets can be classified as current asset and long term assets. Assets which can be realied with one year are classified as current assets. Since the note receivable which are due after one year cannot be classified as current assets, so these will be long term assets.

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