Mills Manufacturing is required to maintain a compensating balance of $15,000 with its bank to maintain a

Question:

Mills Manufacturing is required to maintain a compensating balance of $15,000 with its bank to maintain a line of open credit. The compensating balance is legally restricted as to its use. How should the compensating balance be reported on the and why?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...