On December 31, 2019, Excello Electric Company had $1 million of short-term notes payable due February 7,

Question:

On December 31, 2019, Excello Electric Company had $1 million of short-term notes payable due February 7, 2020. Excello expected to refinance these notes on a longterm basis. On January 15, 2020, the company issued bonds with a face value of $900,000 for $882,000.

On January 22, 2020, the proceeds from the bond issue plus additional cash held by Excello on December 31, 2019, were used to liquidate the $1 million of short-term notes. The December 31, 2019, balance sheet is issued on February 12, 2020.

Required:
Prepare a partial balance sheet as of December 31, 2019, showing how the $1 million of short-term notes payable should be disclosed. Include an appropriate footnote for proper disclosure.

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... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...

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