Question

I have to write balance sheet using below Note Payable(final payment due 2032)

What is the Note Payable(current portion) for current liabilities?

Also, what is the Note Payable(final payment due 2032) for long-term liabilities?

Note Payable (final payment due 2032)

140,000

Answer 1

Note Payable(current portion) for current liabilities:- It is a portion of note payable that will become due and payable within next 12 months i.e. the amount to be paid within next 12 months is to be classified as current liability. So we separate the amount out of total Note Payable liability which will beome due and payable within next 12 months and shown as Note payable (current portion) under Current Liabilities in Balance Sheet. This portion is generally given in question.

Note Payable(final payment due 2032) for long-term liabilities:- It is balance amount of note payable liability i.e. that will become due and payable after 12 months i.e. the amount to be paid after 12 months is to be classified as non-current liability (long term liability) and shown as Note payable (final payment due 2032) under long term liabilities in Balance Sheet. This can be calculated after deducting current portion from the total liability of notes payable.

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