Question

On December 31, 2017, Hattie McDaniel Company had $1,200,000 of short-term debt in the form of notes payable due February 2, 2018. On January 21, 2018, the company issued 25,000 shares of its common stock for $38 per share, receiving $950,000 proceeds after brokerage fees and other costs of issuance. On February 2, 2018, the proceeds from the stock sale, supplemented by an additional $250,000 cash, are used to liquidate the $1,200,000 debt. The December 31, 2017, balance sheet is issued on February 23, 2018. Show how the $1,200,000 of short-term debt should be presented on the December 31, 2017, balance sheet. (Enter account name only and do not provide descriptive information.)

Answer 1

Liabilities $Amount

Current Liabilities:

Notes Payable 250,000

Long Term Liabilities:

Long Term debt

Notes Payable 950,000

Step-by-step explanation:

Partial Balance sheet for December 31,2017:

Liabilities $Amount

Current Liabilities:

Notes Payable 250,000

Long Term Liabilities:

Long Term debt

Notes Payable 950,000

Step-by-step explanation:

On December 31, 2017 Hattie McDaniel Company had $1,200,000 of short-term debt in the form of notes payable due February 2, 2018. On January 21,2018 company refinanced $950,000 and remaining $ 250,000 were refinanced on Feb 2,2018.