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YvonneOzanne · Dec 5, 2012, 08:34 PM

The accounting problem is next. I did answer part for March 31, but am confused as to what long term debt is. Please help and thanks for any solution! Here is the problem:

2. Notes payable. Sentry Security Systems purchased $72,000 of office equipment on April 1, 19X3, by signing a three-year, 12% note payable to Sharp, Inc. One-third of the principal, along with interest on the outstanding balance, is payable each April 1 until maturity. (The first payment is due in 19X4.)
a. Fill in the following table to reflect Sentry's liabilities, assuming a March 31 year-end.

March 31
19X4 19X5 19X6
Current liabilities $80,640
Current portion of long-term debt 32,640
Interest payable 8,640
Long-term liabilities
Long-term debt

b. Assuming that interest is properly recorded at the end of each year, present the proper journal entry to record the last payment on April 1, 19X6.

paraclete · Dec 6, 2012, 12:10 AM

Long term debt is that part of the debt payable beyond twelve months from balance date you are given the current balance

YvonneOzanne · Jan 7, 2013, 06:43 PM

Originally Posted by paraclete

long term debt is that part of the debt payable beyond twelve months from balance date you are given the current balance

I wanted to thank you for your answer. A day after posting, I found out I needed surgery on my back. After the surgery, I was in too much pain to use the computer. I am finally better and realized I did not thank you properly. Once again, I am so grateful that there are people out there that are kind enough to help others.