Lenient Auto signed a $45,000 8%

Lenient Auto signed a $45,000 8%

Lenient Auto signed a $45,000 8% 30-year installment note on November 1, 2013. The note requires semiannual payments of $750 plus interest on May 1 and November 1 of each year. How will Lenient Auto classify this loan on its December 31, 2013 Balance Sheet?

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Current Portion of Long-term debt, $0; Long-term debt, $45,000

 

Current Portion of Long-term debt, $45,000; Long-term debt, $0

 

Current Portion of Long-term debt, $750; Long-term debt, $44,250

 

Current Portion of Long-term debt, $1,500; Long-term debt, $43,500

 

4

Bingo Corp signed a promissory note of $1,000 for one of its vendors in exchange for supplies. $100 cash payment is due upon signing the note and the term is that the balance and interest are due in 90 days at 12% (assume 360 days and that interest payable has been recorded). Bingo will record the transaction at the end of the term as

 

Debit Accounts Receivable $900; Credit Cash $900

 

Debit Notes Payable $900, Debit Interest payable $27; Credit Cash $927

 

Debit Accounts Payable $900, Debit Interest expense $27; Credit Cash $927

 

None of the above

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