Homework Help: accounting

Posted by frustrated on Saturday, May 23, 2009 at 2:16pm.

I don't know if the answer is $0 or $1,000,000. One part says it's 1,000,000 because it's less than a year, but they also have the intention of using part of it for a long term bond, so I think it could be 0. Below is the question. Other answers to select is 100,000 and 900,000, but I'm stuck between 0 or 1,000,000

Question: At Dec 31, 2005, XYZ Corp owed notes payable of 1,000,000 with a maturity date of april 30, 2006. these notes did not arise from transactions in the normal course of business. On Feb 1, 2006, XYZ issued 3,000,000 of 10-year bonds with the intention of using part of the bond proceeds to liquidate the 1,000,000 of notes payable. XYZ's Dec 31, 2005, financial statements were issued on March 29. How much of the 1,000,000 notes payable should be classified as current in XYZ's balance sheet at December 31, 2005?

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