Question

Exercise 13-08 On December 31, 2020, Waterway Company had $1,085,000 of short-term debt in the form of notes payable due February 2, 2021. On January 21, 2021, the company issued 23,800 shares of its common stock for $28 per share, receiving $666,400 proceeds after brokerage fees and other costs of issuance. On February 2, 2021, the proceeds from the stock sale, supplemented by an additional $418,600 cash, are used to liquidate the $1,085,000 debt. The December 31, 2020, balance sheet is issued on February 23, 2021. Show how the $1,085,000 of short-term debt should be presented on the December 31, 2020, balance sheet. (Enter account name only and do not provide descriptive information.) Waterway Company Partial Balance Sheet $

Answer 1

ANSWER:

Waterway company, partial balance sheet, as on December 31 2020

Current liabilities
Notes payable	$1085000

note:

the note payable is due on February 2, 2021 means 1 months from current balance sheet date. As it is due within less than 12 months from the balance sheet date of current year, it is to be classified as current liability.