(Refinancing of Short-Term Debt) On December 31, 2004, Hattie McDaniel Company had

$1,200,000 of short-term debt in the form of notes payable due February 2, 2005. On January 21, 2005, the company issued 25,000 shares of its common stock for $38 per share, receiving $950,000 proceeds after brokerage fees and other costs of issuance. On February 2, 2005, the proceeds from the stock sale, supplemented by an additional $250,000 cash, are used to liquidate the $1,200,000 debt. The December 31, 2004, balance sheet is issued on February 23, 2005.

Instructions Show how the $1,200,000 of short-term debt should be presented on the December 31, 2004, balance sheet, including note disclosure.