On March? 1, 2018, Barker Services issued a 5 5?% long minus ?term notes payable

Question

On March? 1, 2018, Barker Services issued a 5 5?% long minus ?term notes payable for $ 20 comma 000 $20,000. It is payable over a 5 5 minus ?year term in $ 6 comma 000 $6,000 annual principal payments on March 1 of each year plus? interest, beginning March? 1, 2019. How will the notes payable be shown on the balance sheet dated December? 31, 2018? A. $ 6 comma 000 $6,000 shown as current liability and $ 20 comma 000 $20,000 shown as long minus ?term liability B. the entire $ 20 comma 000 $20,000 shown as long minus ?term liability C. $ 20 comma 000 $20,000 shown as current liability only D. $ 6 comma 000 $6,000 shown as current liability and $ 14 comma 000 $14,000 shown as long minus ?term liability Click to select your answer

Explanation / Answer

Option D is correct.

$6000 will be shown as current liability and $14000($20000-$6000) will be shown as a long term liability.

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