On December 31, 2020, Sheridan Company has $5970000 of short-term notes payable due on February 14, 2021. On January 10, 2019, Sheridan arranged a line of credit with Beach Bank which allows Sheridan to borrow up to $4470000 at one percent above the prime rate for three years. On February 2, 2021, Sheridan borrowed $3630000 from Beach Bank and used $1460000 additional cash to liquidate $5130000 of the short-term notes payable. The amount of the short-term notes payable that should be reported as current liabilities on the December 31, 2020 balance sheet which is issued on March 5, 2021 is O $0. O $2340000. O $840000. O $1500000.

On December 31, 2020, Sheridan Company has $5970000 of short-term notes payable due on February 14, 2021. On January 10, 2019, Sheridan arranged a line of credit with Beach Bank which allows Sheridan to borrow up to $4470000 at one percent above the prime rate for three years. On February 2, 2021, Sheridan borrowed $3630000 from Beach Bank and used $1460000 additional cash to liquidate $5130000 of the short-term notes payable. The amount of the short-term notes payable that should be reported as current liabilities on the December 31, 2020 balance sheet which is issued on March 5, 2021 is O $0. O $2340000. O $840000. O $1500000.

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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