McQueen Corporation is a privately held company located in Chicago, Illinois. McQueen has a September 30th fiscal year end. On June 1, 2022 McQueen entered into a term loan agreement with New National Bank. The loan principal is $150,000 and has an annual interest rate of 6%. The loan term stipulates that Principal shall be due on demand, or if no demand is made, in annual installments ($50,000 per year) beginning on July 1, 2023. During October 2022 McQueen Corporations accountants were preparing the September 30th, 2022 year end financial statements. The final issue the accountants need to resolve before completing the financial statements is how to classify the $150,000 loan. They are not sure if McQueen Corporation classify any or all of the $150,000 loan as a current liability or long term liability as of September 30, 2022?

Accounting Issue: How should the $150,000 loan be classified on the 9/30/22 balance sheet?

Your interpretation of the guidance: The loan should be classified as a: a. $150,000 Current Liability, $0 Long Term Liability b. $0 Current Liability, $150,000 Long Term Liability c. $50,000 Current Liability, $100,000 Long Term Liability d. $100,000 Current Liability, $50,000 Long Term Liability