The Blueberry Company Issued a Five-Year Interest-Bearing Note Payable for $75,000

question 7

Multiple Choice

The Blueberry Company issued a five-year interest-bearing note payable for $75,000 on January 1, 2011. Each January the company is required to pay $15,000 on the note. How will this note be reported on the December 31, 2012, balance sheet?

• A) Long-term Debt, $75,000.
• B) Long-term Debt, $60,000.
• C) Long-term Debt, $45,000; Long-term Debt due within one year, $15,000.
• D) Long-term Debt of $60,000; Long-term Debt due within one year, $15,000.

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Definitions:

Futures Market

A marketplace where individuals have the opportunity to trade standardized contracts for futures, which are agreements to purchase predetermined amounts of a commodity or financial instrument at an agreed-upon price, with the delivery scheduled for a future date.

CAPM

Capital Asset Pricing Model, a theory used to determine the expected return on investment by correlating the risk of an asset to its expected return.

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