On December 31, 2021, L Inc. had a $1,800,000 note payable outstanding, due July 31, 2022. L borrowed the money to finance construction of a new plant. L planned to refinance the note by issuing long-term bonds. Because L temporarily had excess cash, it prepaid $530,000 of the note on January 23, 2022. In February 2022, L completed a $3,300,000 bond offering. L will use the bond offering proceeds to repay the note payable at its maturity and to pay construction costs during 2022. On March 13, 2022, L issued its 2021 financial statements. What amount of the note payable should L include in the current liabilities section of its December 31, 2021, balance sheet?
Multiple Choice
$0.
$1,800,000.
$530,000.
$1,270,000
$530,000
Explanation: As per GAAP states that the amount excluded as current liabilities through refinancing cannot exceed the amount actually refinanced or prepaid in the near future period. Therefore the $530,000 a current liability in the December 31, 2021, balance sheet.
On December 31, 2021, L Inc. had a $1,800,000 note payable outstanding, due July 31, 2022....