On march? 1, 2016, baker services issued a? 9% long-term notes payable for? $18,000. it is payable over a? 3-year term in? $6,000 annual principal payments on march 1 of each year plus? interest, beginning march? 1, 2017. how will the notes payable be shown on the balance sheet dated december? 31, 2016?

a.?$6,000 shown as current liability and? $12,000 shown as? long-term liability

b. the entire? $18,000 shown as? long-term liability

c.?$6,000 shown as current liability and? $18,000 shown as? long-term liability

d.?$18,000 shown as current liability only

Question

Business

Reid Peters

6 August, 13:29

On march? 1, 2016, baker services issued a? 9% long-term notes payable for? $18,000. it is payable over a? 3-year term in? $6,000 annual principal payments on march 1 of each year plus? interest, beginning march? 1, 2017. how will the notes payable be shown on the balance sheet dated december? 31, 2016?

a.?$6,000 shown as current liability and? $12,000 shown as? long-term liability

b. the entire? $18,000 shown as? long-term liability

c.?$6,000 shown as current liability and? $18,000 shown as? long-term liability

d.?$18,000 shown as current liability only

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Answers (1)

Know the Answer?

Chaim Dominguez · Answer 1

The notes payable shall be shown in two parts on the balance sheet;

1. Current portion of the notes payable shall be shown under Current liabilities which is $6,000

2. The Long-term portion of the notes payable shall be shown under long-term liabilities which is $12,000

Hence the correct answer is:

a. $6,000 shown as the current liability and $12,000 shown as the long-term liability