Question

0.58 points eBookPrintReferencesCheck my workCheck My Work button is now enabledItem 1 On December 1, 2018, your company borrowed $15,000, a portion of which is to be repaid each year on November 30. Specifically, your company will make the following principal payments: 2019, $2,000; 2020, $3,000; 2021, $4,000; and 2022, $6,000. Show how this loan will be reported in the December 31, 2019 and 2018, balance sheets, assuming principal payments will be made when required.

Answer 1

Balance Sheets 2019 2018

Current liabilities:

Loan Payable $3,000 $2,000

Long-term Liabilities:

Loan Payable $10,000 $13,000

Step-by-step explanation:

a) Data and Calculations:

Principal amount of loan on December 1, 2018 = $15,000

Repayments on November 30 each of the following years:

Year Repayment Loan Balance Current Long-term

Liabilities Liabilities

Dec. 1, 2018 $15,000 $2,000 $13,000

2019, $2,000 13,000 3,000 10,000

2020, $3,000 10,000 4,000 6,000

2021, $4,000 6,000 6,000 0

2022, $6,000 0 0 0

Loan Payable:

December 31, 2018 = $15,000

December 31, 2019 = $13,000