Short-Term Debt Expected to Be RefinancedOn December 31, 2019, Carrboro Textile Company had short-term debt in the form of notes payable totaling $600,000. These notes were due on June 1, 2020. Carrboro expected to refinance these notes on a long-term basis. On February 1, 2020, Carrboro entered into an agreement with Worldwide Life Insurance Company whereby Worldwide will lend Carrboro $480,000, payable in 5 years at 12%. The money will be available to Carrboro on May 20,2020. Carrboro issues its December 31, 2019, year-end financial statements on March 2, 2020.Required:1. Show how the $600,000 notes payable will be classified on Carrboro Textile's balance sheet on December 31, 2019.CARRBORO TEXTILE COMPANYPartial Balance SheetDecember 31, 2019Current Liabilities:Notes payableLong-Term Liabilities:Notes payable2. If short-term debt that is expected be refinanced is classified as a long-term liability the company has shownto refinance at which point it isto classify the obligation as a long-term liability.

Balance sheet shows the financial position of the company.

On December 31, 2019, Carboro Textile Company had shortterm debe in the form of notes payable totaling s00,000. These notes were due on June 1, 2020. Carboro expected to refinance these notes on a long-term basis. On february 1, 2020, Carbors entered into an agreement with Worldwide fe Insurance Compa 2020. Carbere ues s December 31, 201, yearend fnancial sanements on March 2, 20ao. Required 1. Show how the so0.000 notem payable wil be dansifed on Carboro Teties balance sheet on December 31, 201a. CARRBORO TEXTIILE COMPANY Partial Balance Sheet December 31. 2019 Cument Labes Notes payable Long-Term Lablites Notes pyable

On December 31, 2019, Carboro Textile Company had shortterm debe in the form of notes payable totaling s00,000. These notes were due on June 1, 2020. Carboro expected to refinance these notes on a long-term basis. On february 1, 2020, Carbors entered into an agreement with Worldwide fe Insurance Compa 2020. Carbere ues s December 31, 201, yearend fnancial sanements on March 2, 20ao. Required 1. Show how the so0.000 notem payable wil be dansifed on Carboro Teties balance sheet on December 31, 201a. CARRBORO TEXTIILE COMPANY Partial Balance Sheet December 31. 2019 Cument Labes Notes payable Long-Term Lablites Notes pyable

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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