7 value: 12.00 points Barton Chocolates used a promissory note to borrow $1,100,

Question

7 value: 12.00 points Barton Chocolates used a promissory note to borrow $1,100,000 on July 1, 2015, at an annual interest rate of 6 percent. The note is to be repaid in yearly installments of $220,000, plus accrued interest, on June 30 of every year until the note is paid in full (on June 30, 2020). Show how the results of this transaction would be reported in a classified balance sheet prepared as of December 31, 2015. (Do not round intermediate calculations.) BARTON CHOCOLATES Balance Sheet (partial) As of December 31, 2015

Explanation / Answer

Barton Chocolates

Balance sheet as on December 31,2015

Particulars Amount($)

Current liabilities:

Interest payable $33000

Current portion of long term debt $220000

Total current liabilities $253000

Long term notes payable $880000

Interest payable = $1100000 * 65 * 6/12

= $33000.

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