On December 31, 2021, Indiglow Company has a five-year note payable of $ 450,000. Of that balance, $ 90,000 will be paid within one year from the balance sheet date. How much of the note payable should Indiglow Company report as a long-term liability when they prepare the December 31, 2021, statement of financial position?
A) $ 360,000
B) $ 450,000
C) $ 90,000
D) $ 540,000

Question

Quizplus · Accepted Answer

The long-term liability is the portion of the note payable that is not due within the next year. Since $90,000 is due within one year, the remaining $360,000 ($450,000 - $90,000) is considered a long-term liability.

On December 31, 2021, Indiglow Company Has a Five-Year Note