Answer to Question #213010 in Accounting for Milan

Question

Shero Corp has a $3,00,000 note due two months after the year 18 balance sheet date. On January 7, Year 19, before the financial statements for Year 18 are issued, Shero Corp issues $3,200,000 of long-term bonds. Proceeds from the bonds were to be used to repay the $3,000,000 note when it became due. How should Shero Corp classify the note in its Year 18 balance sheet?

·      $3,000,000 as a non-current liability 

Can you show me a timeline with all the dates shown in this problem and what they represent? Thank you.

The answer is highlighted. I don't need the answer. Just a timeline. Thank you.

Answer 1

28th February 2018, Note Payable (The note that was issued in February and thus was payable by February 2019, and therefore a non-current liability)

7th January 2019 Issue of Long term bonds $3,200,000

28th February 2019 Payment of Notes payable due