On February 10, 2010, After Issuance of Its Financial Statements

question 91

Multiple Choice

On February 10, 2010, after issuance of its financial statements for 2009, House Company entered into a financing agreement with Lebo Bank, allowing House Company to borrow up to $4,000,000 at any time through 2012.Amounts borrowed under the agreement bear interest at 2% above the bank's prime interest rate and mature two years from the date of loan.House Company presently has $1,500,000 of notes payable with First National Bank maturing March 15, 2010.The company intends to borrow $2,500,000 under the agreement with Lebo and liquidate the notes payable to First National.The agreement with Lebo also requires House to maintain a working capital level of $6,000,000 and prohibits the payment of dividends on ordinary shares without prior approval by Lebo Bank.From the above information only, the total short-term debt of House Company as of the December 31, 2010 statement of financial position date is

• A)$0.
• B)$1,500,000.
• C)$2,000,000.
• D)$4,000,000.

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Definitions:

Merton's Contributions

Refers to the significant sociological contributions of Robert K. Merton, including theories on social structure, anomie, and the sociology of science.

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