Question

Jimenez transportation purchased five new transportation vehicles in 2016. they plan to pay these vehicles off in even installments over the next 8 years. on the 2017 year-end financial statements, how would the amount jimenez plans to pay off in 2018 differ from the amount they plan to pay off in 2019

Answer 1

The amount paid off in 2018, being planned for the upcoming year, would be considered a current liability. Since the 2019 payoff amount comes outside the 1-year window, this would be a long-term liability. Long-term liabilities are much less stable in their timeframe than current liabilities.