A Company Has $5,000,000 in Long-Term Debt Outstanding

question 11

Multiple Choice

A company has $5,000,000 in long-term debt outstanding.It expects to repay the loan evenly over the next four years.Which of the following represents how it will be shown on the year-end statement of financial position?

• A)Accounts Payable: $1,250,000,Long-Term Debt: $3,750,000
• B)Current Portion of Long-Term Debt: $1,250,000,Long-Term Debt: $3,750,000
• C)Current Portion of Long-Term Debt: $2,500,000,Long-Term Debt: $2,500,000
• D)Long-Term Debt: $5,000,000

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Definitions:

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a specified call price.

Issuing Corporation's Common Stock

The process by which a corporation releases its own shares of stock to the public for the first time or through subsequent offerings.

Long-term Notes

Debt obligations with a maturity of more than one year, used by companies to finance operations or major purchases.

Multiple Lenders

A situation where a borrower has loans or credit lines from more than one lender at the same time.