Answer:
B) Current liabilities of $400,000; long-term liabilities of $900,000.
Explanation:
Option B, detailed as follows:
$250,000, taken from the bank's credit line that expires in 1 year, therefore, is a current Liability.
$150,000 of Current Liability that comes from the annual installments of the secured note of $750,000, the other $600,000 is Long Term.
Finally, $300,000, Long Term of 3-year balloon note.
$250,000 + $150,000 = $400,000 Current Liabilities.
$600,000 + $300,000 = $900,000 Long Term Liabilities.
