Question

On December 24, 2022, Gill’s Marina borrowed $250,000 from Louie the Laker. The loan requires a single payment of $272,620.57 on December 31, 2023. An excerpt from the amortization schedule is provided below. What total amount of non-current liability related to this loan should Gill’s Marina report on its December 31, 2022 balance sheet?

Answer 1

The total amount of non-current liability related to the loan on Gill's Marina's December 31, 2022 balance sheet is $22,620.57.

Step-by-step explanation:

To calculate the total amount of non-current liability related to the loan on Gill's Marina's balance sheet, we need to determine the amount of the loan that has not yet been paid off. Since the loan requires a single payment of $272,620.57 on December 31, 2023, we can assume that no payments have been made as of December 31, 2022.

To find the total amount of the loan that remains, we subtract the payment that is due on December 31, 2023 from the initial loan amount:

Total amount of non-current liability = Amount of loan - Payment due

Total amount of non-current liability = $250,000 - $272,620.57

Total amount of non-current liability = -$22,620.57

Therefore, Gill's Marina should report a total amount of non-current liability of $22,620.57 on its December 31, 2022 balance sheet.

Answer 2

To determine the total amount of non-current liability related to the loan on Gill's Marina's December 31, 2022 balance sheet, we need to consider the portion of the loan that is due after one year from the balance sheet date.

Given that the loan was borrowed on December 24, 2022, and the payment is due on December 31, 2023, the payment falls within one year from the balance sheet date. Therefore, the portion of the loan due within one year is considered a current liability and not included in the non-current liability section of the balance sheet.

Hence, the total amount of non-current liability related to this loan that Gill's Marina should report on its December 31, 2022 balance sheet is $0.

Since the payment is due within one year, it is classified as a current liability and not part of the non-current liability section, which typically includes obligations due after one year from the balance sheet date.

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