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18 January, 22:28

M10-5 Reporting Current and Noncurrent Portions of Long-Term Debt [LO 10-2] On December 1, 2018, your company borrowed $40,500, a portion of which is to be repaid each year on November 30. Specifically, your company will make the following principal payments: 2019, $5,400; 2020, $8,100; 2021, $10,800; and 2022, $16,200. Show how this loan will be reported in the December 31, 2019 and 2018 balance sheets, assuming principal payments will be made when required.

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  1. 18 January, 22:47
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    The extracts from balance sheet are given below;

    Explanation:

    Extracts from Balance Sheet As at December 31,2018

    Current Liabilities

    Current portion of long term debt $5,400

    Long Term Liabilities

    Long Term Debt ($40,500-$5,400) $35,100

    Extracts from Balance Sheet As at December 31,2019

    Current Liabilities

    Current portion of long term debt $8,100

    Long Term Liabilities

    Long Term Debt ($40,500-$5,400-$8,100) $27,000
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