On December 31, 2020, Marigold Company has $6,990,000 of
short-term debt in the form of notes payable to Gotham State Bank
due in 2021. On December 28, 2021, Marigold enters into a
refinancing agreement with Gotham that will permit it to borrow up
to 60% of the gross amount of its accounts receivable. Receivables
are expected to range between a low of $5,984,000 in May to a high
of $7,987,000 in October during the year 2021. The interest cost of
the maturing short-term debt is 15%, and the new agreement calls
for a fluctuating interest at 1% above the prime rate on notes due
in 2022. Marigold’s December 31, 2020, balance sheet is issued on
February 15, 2021.
Prepare a partial balance sheet for Marigold at December 31, 2020,
showing how its $6,990,000 of short-term debt should be presented.
(Enter account name only and do not provide descriptive
information.)
On December 31, 2020, Marigold Company has $6,990,000 of short-term debt in the form of notes...
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