DD Company reported the following liability balances on December 31, 2020: 12% note payable issued on March 1, 2019, maturing on March 1, 2021 5,000,000 10% note payable issued April 1, 2019 maturing April, 2021 2,000,000 The 2020 financial statements were issued on March 31, 2021. On January 31, 2021, the entire P5,000,000 balance of the 12% note payable was refinanced through issuance of a long-term obligation payable lump sum. On the other hand, under the loan agreement for the 10% note payable, the entity has the discretion to refinance the obligation, but they are given only twelve months after December 31, 2020. What amount of the notes payable should be classified as current on December 31, 2020?
DD Company reported the following liability balances on December 31, 2020: 12% note payable issued on March 1, 2019, maturing on March 1, 2021 5,000,000 10% note payable issued April 1, 2019 maturing April, 2021 2,000,000 The 2020 financial statements were issued on March 31, 2021. On January 31, 2021, the entire P5,000,000 balance of the 12% note payable was refinanced through issuance of a long-term obligation payable lump sum. On the other hand, under the loan agreement for the 10% note payable, the entity has the discretion to refinance the obligation, but they are given only twelve months after December 31, 2020. What amount of the notes payable should be classified as current on December 31, 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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DD Company reported the following liability balances on December 31, 2020:
| 12% note payable issued on March 1, 2019, maturing on March 1, 2021 | 5,000,000 |
| 10% note payable issued April 1, 2019 maturing April, 2021 | 2,000,000 |
The 2020 financial statements were issued on March 31, 2021. On January 31, 2021, the entire P5,000,000 balance of the 12% note payable was refinanced through issuance of a long-term obligation payable lump sum. On the other hand, under the loan agreement for the 10% note payable, the entity has the discretion to refinance the obligation, but they are given only twelve months after December 31, 2020. What amount of the notes payable should be classified as current on December 31, 2020?
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