Question

On September 1, 2021, Southwest Airlines borrows $40.1 million, of which $8.2 million is due next year. Show how Southwest Airlines would record the $40.1 million debt on its December 31, 2021, balance sheet. (Enter your answers in dollars, not millions. For example, $5.5 million should be entered as 5,500,000.)On September 1, 2021, Southwest Airlines borrows $40.1 million, of which $8.2 million is due next year. Show how Southwest Airlines would record the $40.1 million debt on its December 31, 2021, balance sheet. (Enter your answers in dollars, not millions. For example, $5.5 million should be entered as 5,500,000.)

Answer 1

On Southwest Airlines' December 31, 2021, balance sheet, the $40.1 million debt would be recorded as a long-term liability. It could be classified as long-term debt or a long-term loan in the 'Long-Term Liabilities' section.

Step-by-step explanation:

On Southwest Airlines' December 31, 2021, balance sheet, the $40.1 million debt would be recorded as a liability.

Specifically, it would be recorded as a long-term liability since only $8.2 million is due next year.

The debt would likely be categorized as a long-term loan or long-term debt.

Here is an example of how it could be presented on the balance sheet:

• Long-Term Liabilities
• Long-Term Debt: $40,100,000