Assume that on December 1, 2015, your company borrowed s33,000, a portion of whi

Question

Assume that on December 1, 2015, your company borrowed s33,000, a portion of which is to be repaid each year on November 30. Specifically. your company will make the following principal payments: 2016, $4.400: 2017, $6,600: 2018, $8,800; and 2019, $13,200. Show how this loan will be reported in the December 31, 2016 and 2015 balance sheets, assuming that principal payments will be made when required Answer is not complete. Balance Sheet (Partial) As of December 31 2016 2015 Current Liabilities Current Portion of Long-term Debt |$ 6.600 |s 4400 Long-term Liabilities Long-term Debt Total Liabilities S 6,600 $ 4,400

Explanation / Answer

Current liabilities means, amount which to be paid or due within 12 months. in given case, difference in current liabilities and borrowings will show as long term liability

Balance sheet (Partial) As of December 31 2016 2015 Current liabilities Current portion of long term debt $                                        6,600 $                                                                            4,400 Long term liabilities Long term debt $8,800+$13,200 = $22,000 $6,600+$8,800+$13,200 = $22,000 = $28,600 Total liabilities $                                      28,600 $                                                                          33,000

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