On December 31, 2020, Vaughn Manufacturing has $6030000 of short-term notes payable due on February 14, 2021. On January 1 2019, Vaughn arranged a line of credit with Beach Bank which allows Vaughn to borrow up to $4470000 at one percent above the prime rate for three years. On February 2, 2021, Vaughn borrowed $3560000 from Beach Bank and used $1450000 additional cash liquidate $5120000 of the short-term notes payable. The amount of the short-term notes payable that should be reported as curren liabilities on the December 31, 2020 balance sheet which is issued on March 5, 2021 is Ⓒ$910000. O $0. O $2470000. O $1560000.

On December 31, 2020, Vaughn Manufacturing has $6030000 of short-term notes payable due on February 14, 2021. On January 1 2019, Vaughn arranged a line of credit with Beach Bank which allows Vaughn to borrow up to $4470000 at one percent above the prime rate for three years. On February 2, 2021, Vaughn borrowed $3560000 from Beach Bank and used $1450000 additional cash liquidate $5120000 of the short-term notes payable. The amount of the short-term notes payable that should be reported as curren liabilities on the December 31, 2020 balance sheet which is issued on March 5, 2021 is Ⓒ$910000. O $0. O $2470000. O $1560000.

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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Question

On December 31, 2020, Vaughn Manufacturing has $6030000 of short-term notes payable due on February 14, 2021. On January 10,
2019, Vaughn arranged a line of credit with Beach Bank which allows Vaughn to borrow up to $4470000 at one percent above the
prime rate for three years. On February 2, 2021, Vaughn borrowed $3560000 from Beach Bank and used $1450000 additional cash to
liquidate $5120000 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
$910000.
$0.
$2470000.
$1560000.

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