Question
Jimenez Transportation purchased five new transportation vehicles in 2021. They plan to pay these vehicles off in even installments over the next 8 years. On
Jimenez Transportation purchased five new transportation vehicles in 2021. They plan to pay these vehicles off in even installments over the next 8 years. On the 2022 year-end financial statements, how would the amount Jimenez plans to pay off in 2023 differ from the amount they plan to pay off in 2024?
A ) The amount they plan to pay off in 2023 would be classified as depreciation, and the amount they plan to pay off in 2024 would be classified as a long-term liability.
B) The amount they plan to pay off in 2023 would be classified as property, plant, and equipment, and the amount they plan to pay off in 2024 would be classified as a long-term investment. C) The amount they plan to pay off in 2023 would be classified as a current liability, and the amount they plan to pay off in 2024 would be classified as a long-term investment.
D) The amount they plan to pay off in 2023 would be classified as a current liability, and the amount they plan to pay off in 2024 would be classified as a long-term liability.
What is the answer and why?
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Finance The Basics
Authors: Erik Banks
1st Edition
0415384575, 9780415384575
