Question

Assume that on December 1, 2015, your company borrowed $25,500, a portion of which is to be repaid each year on November 30. Specifically, your company will make the following principal payments: 2016, $3,400; 2017, $5,100; 2018, $6,800; and 2019, $10,200. Show how this loan will be reported in the December 31, 2016 and 2015 balance sheets, assuming that principal payments will be made when required. Balance Sheet (Partial) As of December 31 2016 2015 $ $ Current Liabilities Current Portion of Long-term Debt Long-term Debt Long-term Liabilities 5,100 17,000 3,400 22,100 Total Liabilities $ 22,100 $ 25,500

Answer 1

D Balance sheet (Partial) As of December 31 3 4 2016 2015 Current liabilities: 5 Current portion of long-term debt Long-term debt: 6 5,100 3,400 7 22,100 Long-term liabilities 17,000 9 10 Total liabilities 11 22,100 25,500 Working note: A C D Balance sheet (Partial) 2. As of December 31 2015 2016 Current liabilities: 5 Current portion of long-term debt Long-term debt: Long-term liabilities 3400 6 5100 7 -6800+10200 25500-D6 8 10 Total liabilities -C8+C6 D8+D6 11 co. LO LO CO co st LO