Chapter 9, Problem 9.5MC

On November 30, Year 1, Derin Corporation agreed with its customers to change accounts receivable to notes receivable in order to allow a longer payment period. The terms of the notes receivable are that the principal is due on November 30, Year 4, and the interest payments are due annually on November 30 until November 30, Year 4. Derin’s customer has made all required payments to date. How should the notes receivable and accrued interest be classified on the balance sheet as of June 30, Year 3?

	Notes Receivable	Accrued Interest
a.	Current	Current
b.	Current	Noncurrent
c.	Noncurrent	Current
d.	Noncurrent	Noncurrent