On February 10, 2021, after issuance of its financial statements for 2020, Crane Company entered into a financing agreement with Cleveland Bank, allowing Crane Company to borrow up to $7960000 at any time through 2023. Amounts borrowed under the agreement bear interest at 2% above the bank's prime interest rate and mature two years from the date of loan. Crane Company presently has $3000000 of notes payable with Star National Bank maturing March 15, 2021. The company intends to borrow $4950000 under the agreement with Cleveland and liquidate the notes payable to Star National Bank. The agreement with Cleveland also requires Crane to maintain a working capital level of $11950000 and prohibits the payment of dividends on common stock without prior approval by Cleveland Bank. From the above information only, the total short-term debt of Crane Company as of the December 31, 2020 balance sheet date is O $ 3990000. O $ 3000000. O $7960000. O $0.

On February 10, 2021, after issuance of its financial statements for 2020, Crane Company entered into a financing agreement with Cleveland Bank, allowing Crane Company to borrow up to $7960000 at any time through 2023. Amounts borrowed under the agreement bear interest at 2% above the bank's prime interest rate and mature two years from the date of loan. Crane Company presently has $3000000 of notes payable with Star National Bank maturing March 15, 2021. The company intends to borrow $4950000 under the agreement with Cleveland and liquidate the notes payable to Star National Bank. The agreement with Cleveland also requires Crane to maintain a working capital level of $11950000 and prohibits the payment of dividends on common stock without prior approval by Cleveland Bank. From the above information only, the total short-term debt of Crane Company as of the December 31, 2020 balance sheet date is O $ 3990000. O $ 3000000. O $7960000. O $0.

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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