Short-Term Debt Expected to Be Refinanced On December 31, 2007 Carrboro Textile Company had short-term debt in

Question:

Short-Term Debt Expected to Be Refinanced On December 31, 2007 Carrboro Textile Company had short-term debt in the form of notes payable totaling $600,000. These notes were due on June 1, 2008. Carrboro expected to refinance these notes on a long-term basis. On February 1, 2008 Carrboro entered into an agreement with Worldwide Life Insurance Company whereby Worldwide will lend Carrboro $450,000, payable in five years at 12%. The money will be available to Carrboro on May 20, 2008. Carrboro issues its December 31, 2007 year-end on March 2, 2008.

Required
Show how the $600,000 notes payable will be classified on Carrboro Textile Company’s on December 31, 2007.

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