On December 31 2016 Carrboro Textile Company had short

term debt in #2482

On December 31,2016, Carrboro Textile Company had short-term debt in the form of notes
payable totaling $600,000. These notes were due on June 1, 2017. Carrboro expected to
refinance these notes on a long term basis. On February' 1,2017, Carrboro entered into an
agreement with Worldwide Life Insurance Company whereby Worldwide will lend Carrboro
$450,000, payable in 5 years at 12%. The money will be available to Carrboro on May 20, 2017.
Carrboro issues its December 31,2016, year-and financial statements on March 2,
2017.Required:1. Show' how the $600,000 notes payable will be classified on Carrboro
Textile’s balance sheet on December 31,2016.2. Next Level What is necessary' in order for a
company to exclude short-term debt that is expected to be refinanced on a long-term basis from
the current liability classification?View Solution:
On December 31 2016 Carrboro Textile Company had short term debt in

ANSWER
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