As of December 31, 2020, Red Technologies liability account balances included the following: $250,000, 7% note payable
Question:
As of December 31, 2020, Red Technologies liability account balances included the following:
$250,000, 7% note payable issued October 1, 2020 maturing September 30, 2021
$600,000, 8% note payable issued April 1, 2020 payable in four equal annual principal installments of $150,000.
Red's December 31, 2020 financial statements are issued on March 31, 2021. On January 15, 2021, Red refinanced the entire $600,000 balance of the 8% note by issuing a long-term obligation payable in a lump sum. On March 10, 2021, Red also consummated a non-cancelable agreement with the lender to refinance the 7%, $250,000 note on a long-term basis, using readily determinable terms that havenotyet been implemented. Based on this information, what amount of notes payable should Red classify as current on its December 31, 2020 balance sheet?
- A $175,000.
- B $125,000.
- C $0.
- D $400,000.