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    shanika18's Avatar
    shanika18 Posts: 6, Reputation: 1
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    #1

    Dec 7, 2010, 09:17 AM
    Principal amount 100000 6% interest 5 yr term what is current and longterm liability
    Athen company signed a promissory note on Jan. 2010 with the folllowing terms:
    Principal amount 100000 the interest rate is 6% with 5 yr term what is the current and longterm liability
    Just Looking's Avatar
    Just Looking Posts: 1,610, Reputation: 480
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    #2

    Dec 7, 2010, 09:26 AM

    At the time of signing, there is no current liability. As interest accrues, it will be current. Since the note is not due for 5 years, it is long-term - as would be any note over a year.
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    shanika18 Posts: 6, Reputation: 1
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    #3

    Dec 7, 2010, 09:35 AM

    Athen company signed a promissory note on Jan. 2010 with the folllowing terms:
    Principal amount 100000 the interest rate is 6% with 5 yr term what is the current and longterm liability

    The principal is to be paid in equal amounts over the 5 year term of the note. How should this note appear on the balance sheet as of December 31,2010? Assume that the appropriate amount was paid in 2010
    Just Looking's Avatar
    Just Looking Posts: 1,610, Reputation: 480
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    #4

    Dec 7, 2010, 09:37 AM

    Is this a new question or more info on the first question? If it is to be paid equally over the 5 years, anything that is due within one year is current.
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    shanika18 Posts: 6, Reputation: 1
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    #5

    Dec 7, 2010, 09:44 AM

    So what is the long term liabilities? Is the current liabilites 106000?
    Just Looking's Avatar
    Just Looking Posts: 1,610, Reputation: 480
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    #6

    Dec 7, 2010, 09:46 AM

    It's a five year promissory note, to be paid in equal installments over 5 years. That means they will pay $20,000 per year. $20,000 is current (due within a year) and the balance is long-term (due in over a year). They said interest is paid as due, so the $6,000 of interest does not figure into this.
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    shanika18 Posts: 6, Reputation: 1
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    #7

    Dec 7, 2010, 09:54 AM

    So in numbers what is the current liabilities and the long term liabilities
    tickle's Avatar
    tickle Posts: 23,796, Reputation: 2674
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    #8

    Dec 7, 2010, 10:14 AM
    Quote Originally Posted by shanika18 View Post
    so in numbers what is the current liabilities and the long term liabilities

    I would say, J Lo just helped you out considerably with your homework question. That was very gracious of her because we don't normally assist with homework.
    Knowing what you know currently, is there any way you can finish it off yourself?
    Tick
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    shanika18 Posts: 6, Reputation: 1
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    #9

    Dec 7, 2010, 10:26 AM

    Thanks for your comment! I was asking her for numbers because I wasn't understanding what she was talking about. I was trying to compare what I had already done with what she was telling me!
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