Question

Included in Vernon Corp.'s liability account balances at December 31, 2017, were the following: 7% note payable issued October 1, 2017, maturing September 30, 2018 $375,000 8% note payable issued April 1, 2017, payable in six equal annual installments of $225,000 beginning April 1, 2018 900,000 Vernon's December 31, 2017 financial statements were issued on March 31, 2018. On January 15, 2018, the entire $900,000 balance of the 8% note was refinanced by issuance of a long-term obligation payable in a lump sum. In addition, on March 10, 2018, Vernon consummated a noncancelable agreement with the lender to refinance the 7%, $375,000 note on a long-term basis, on readily determinable terms that have not yet been implemented. On the December 31, 2017 balance sheet, the amount of the notes payable that Vernon should classify as short-term obligations is:

Answer 1

Answer:

Explanation:

Short-term: due within a year after closing the statment: that is Dec 31th 2018

There are two promissory notes outstanding:

October 1st

and April 1st

April 1st 2017 was refinanced to a single payment in the long-term thusnot short term

Also during March, the borrower agree  to refinance

The negociation for Oct 1st provee successfully thus we should consider the promissory note long-term notes still.

We can conclde there are no hort term note payable for Vernon as it manage to refinance all his short.term debt