Purdum Farms borrowed $10 million by signing a five-year note on December 31, 2015. Repayments of the principal are payable annually in installments of $2 million each. Purdum Farms makes the first payment on December 31, 2016 and then prepares its balance sheet. What amount will be reported as current and long-term liabilities, respectively, in connection with the note at December 31, 2016, after the first payment is made? Zero in current liabilities and $10 million in long-term liabilities. $2 million in current liabilities and $6 million in long-term liabilities. $2 million in current liabilities and $8 million in long-term liabilities. Zero in current liabilities and $8 million in long-term liabilities.

Purdum Farms borrowed $10 million by signing a five-year note on December 31, 2015. Repayments of the principal are payable annually in installments of $2 million each. Purdum Farms makes the first payment on December 31, 2016 and then prepares its balance sheet. What amount will be reported as current and long-term liabilities, respectively, in connection with the note at December 31, 2016, after the first payment is made? Zero in current liabilities and $10 million in long-term liabilities. $2 million in current liabilities and $6 million in long-term liabilities. $2 million in current liabilities and $8 million in long-term liabilities. Zero in current liabilities and $8 million in long-term liabilities.

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 11E

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