Question

On December 31, 2015, Peligrino Co. has a long term note payable of $800,000. Of that balance, $100,000 will be paid within one year from the balance sheet date. How much of the note payable should Peligrino Co. report as a long term liability when they prepare the December 31, 2015 balance sheet

Answer 1

$700,000

Step-by-step explanation:

The portion of the long term note payable that is due within one year must be reported as current portion of long term debt (CPLTD) and must be included under current assets. In this case, the current portion of the long term debt is $100,000, so the portion that must be reported as long term debt is $800,000 - $100,000 = $700,000.