
(a)
Current liability: Every company has some debts or liabilities which need to be paid in less than one year or during the current accounting period. Those debts or liabilities are called current liabilities.
Notes payable: When a company borrows money from banks by a written agreement to pay back in the predetermined time with certain interest and other charges, those debts are called note payable.
To identify: The notes payable for $100,000 due in 2 years is a current liability or not.
(b)
To identify: A 10-year mortgage payable for $300,000, payable in ten $30,000 annual payments is a current liability or not.
(c)
To identify: Interest payable of $15,000 on a mortgage is a current liability or not.
(d)
To identify: The accounts payable of $60,000 is a current liability or not.

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Chapter 11 Solutions
Accounting Principles 12th Edition
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