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Short term, Long Term B 40,000 960,000

Short term, Long Term B 40,000 960,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Entity A had 1,000,000 notes payable due on June 15, 20x6. On December 31, 20x5, it signed an agreement to roll over the P1,000,000 note on long-term basis. Under the agreement, the amount that can be rolled over cannot exceed 80% of the value of the collateral Entity A was providing. As of December 31, 20x5, the value of the collateral was P1,200,000 and was not expected to fall below this amount during 20x6. In its December 31, 20x5, balance sheet, Entity A should classify the notes payable as Short term, Long Term A 1,000,000 Short term, Long Term В 40,000 960,000 Short term, Long Term C) 200,000 800,000 Short term, Long Term D 1, 000,000
Transcribed Image Text:Entity A had 1,000,000 notes payable due on June 15, 20x6. On December 31, 20x5, it signed an agreement to roll over the P1,000,000 note on long-term basis. Under the agreement, the amount that can be rolled over cannot exceed 80% of the value of the collateral Entity A was providing. As of December 31, 20x5, the value of the collateral was P1,200,000 and was not expected to fall below this amount during 20x6. In its December 31, 20x5, balance sheet, Entity A should classify the notes payable as Short term, Long Term A 1,000,000 Short term, Long Term В 40,000 960,000 Short term, Long Term C) 200,000 800,000 Short term, Long Term D 1, 000,000
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