On November 1,2012,EZ Products Borrowed $48,000 on a 5%,10-Year Note

question 147

Multiple Choice

On November 1,2012,EZ Products borrowed $48,000 on a 5%,10-year note with annual installment payments of $4,800 plus interest due on November 1 of each succeeding year.
-On November 1,the principal amount was initially recorded as Long-term notes payable,and then a second entry was made to reclassify the current portion.Which of the following is the proper reclassification entry?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Long-term notes payable } & 4,800 & \\
• \hline \text { Current portion of long-term notes payable } & & 4,800 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Current portion of long-term notes payable } & 4,800 & \\
• \hline \text { Accounts payable } & & 4,800 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Long-term notes payable } & 4,800 & \\
• \hline \text { Accounts payable } & & 4,800 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Current portion of long-term notes payable } & 4,800 & \\
• \hline \text { Long-term notes payable } & & 4,800 \\
• \hline
• \end{array}\]

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