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Davis has the following obligations at December 31, 2025: Note payable due in monthly installments of $50,000, plus interest, through November 30, 2026 Note payable due in monthly installments of $30,000, plus interest, through January 31, 2027. Note payable originally due in quarterly installments of $60,000 plus interest through March 31, 2026 but refinanced on December 31, 2025 for quarterly installments of $80,000 plus interest through October 31, 2026. + Note payable issued on March 31, 2025 for $500,000 at 6% interest. Interest is paid every month and principal is due March 31, 2027. Note payable issued on March 31, 2025 for $1,000,000 at 6% interest. Interest and principal are due March 31, 2026. Simple interest is used. Instructions a. How much should Davis include in current liabilities at December 31, 2025? b. How much should Davis include in long-term liabilities at December 31, 2025?

Davis has the following obligations at December 31, 2025: Note payable due in monthly installments of $50,000, plus interest, through November 30, 2026 Note payable due in monthly installments of $30,000, plus interest, through January 31, 2027. Note payable originally due in quarterly installments of $60,000 plus interest through March 31, 2026 but refinanced on December 31, 2025 for quarterly installments of $80,000 plus interest through October 31, 2026. + Note payable issued on March 31, 2025 for $500,000 at 6% interest. Interest is paid every month and principal is due March 31, 2027. Note payable issued on March 31, 2025 for $1,000,000 at 6% interest. Interest and principal are due March 31, 2026. Simple interest is used. Instructions a. How much should Davis include in current liabilities at December 31, 2025? b. How much should Davis include in long-term liabilities at December 31, 2025?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Davis has the following obligations at December 31, 2025: Note payable due in monthly installments of $50,000, plus interest, through November 30, 2026 Note payable due in monthly installments of $30,000, plus interest, through January 31, 2027. Note payable originally due in quarterly installments of $60,000 plus interest through March 31, 2026 but refinanced on December 31, 2025 for quarterly installments of $80,000 plus interest through October 31, 2026. Note payable issued on March 31, 2025 for $500,000 at 6% interest. Interest is paid every month and principal is due March 31, 2027. Note payable issued on March 31, 2025 for $1,000,000 at 6% interest. Interest and principal are due March 31, 2026. Simple interest is used. Instructions a. How much should Davis include in current liabilities at December 31, 2025? b. How much should Davis include in long-term liabilities at December 31, 2025?
Transcribed Image Text:Davis has the following obligations at December 31, 2025: Note payable due in monthly installments of $50,000, plus interest, through November 30, 2026 Note payable due in monthly installments of $30,000, plus interest, through January 31, 2027. Note payable originally due in quarterly installments of $60,000 plus interest through March 31, 2026 but refinanced on December 31, 2025 for quarterly installments of $80,000 plus interest through October 31, 2026. Note payable issued on March 31, 2025 for $500,000 at 6% interest. Interest is paid every month and principal is due March 31, 2027. Note payable issued on March 31, 2025 for $1,000,000 at 6% interest. Interest and principal are due March 31, 2026. Simple interest is used. Instructions a. How much should Davis include in current liabilities at December 31, 2025? b. How much should Davis include in long-term liabilities at December 31, 2025?
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