12.00 points Barton Chocolates used a promissory note to borrow $1,450,000 on Ju

Question

12.00 points Barton Chocolates used a promissory note to borrow $1,450,000 on July 1, 2015, at an annual interest rate of 8 percent. The note is to be repaid in yearly installments of $290,000, plus accrued interest, on June 30 of every year until the note is paid in full (on June 30, 2020). Show how the results of this transaction would be reported in a classified balance sheet prepared as of December 31, 2015. (Do not round tmediate calculations.) BARTON CHOCOLATES Balance Sheet (partial) As of December 31, 2015

Explanation / Answer

Ans. BARTON CHOCOLATES Balance Sheet (partial) As of december 31, 2015 LIABILITIES AMOUNT AMOUNT Current liabilities: Interest payable 58000 Part of long term debt (current year) 290000 Total current liabilities 348000 348000 Long term Liabilities: Notes payable 1160000 1160000 Total liabilities 1508000 *Interest payalbe                                = 1450000 * 8% * 6/12 58000 *Long term notes payable =   1450000 - 290000 1160000 Part of long term debt = one year/ current portion of long term liability.

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