On January 1, 2015, Donahue Company, a Calendar-Year Company, Issued

question 5

Multiple Choice

On January 1, 2015, Donahue Company, a calendar-year company, issued $600,000 of notes payable, of which $150,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2015, is

• A)Current Liabilities, $600,000.
• B)Long-term Debt , $600,000.
• C)Current Liabilities, $150,000; Long-term Debt, $450,000.
• D)Current Liabilities, $450,000; Long-term Debt, $150,000.

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Definitions:

Extraordinary Item

An unusual and infrequent gain or loss that is reported separately in the financial statements.

Early Retirement

The act of leaving one's job and stopping work before the typical age or requirement for pension eligibility has been reached.

Foreign Currency

Currency used in a country other than the domestic one, impacting transactions, accounting, and financial reporting.

Extraordinary Items

Unusual and infrequent gains or losses that are reported separately on a company's income statement.