M10-5 Reporting Current and Noncurrent Portions of Long-Term Debt [LO 10-2] On December 1, 2018, your company borrowed $40,500, a portion of which is to be repaid each year on November 30. Specifically, your company will make the following principal payments: 2019, $5,400; 2020, $8,100; 2021, $10,800; and 2022, $16,200. Show how this loan will be reported in the December 31, 2019 and 2018 balance sheets, assuming principal payments will be made when required.

Respuesta :

Answer:

The extracts from balance sheet are given below;

Explanation:

Extracts from Balance Sheet As at December 31,2018

Current Liabilities

Current portion of long term debt            $5,400

Long Term Liabilities

Long Term Debt ($40,500-$5,400)           $35,100

Extracts from Balance Sheet As at December 31,2019

Current Liabilities

Current portion of long term debt                       $8,100

Long Term Liabilities

Long Term Debt ($40,500-$5,400-$8,100)           $27,000