The bank loan principal to be paid in Year 2008 is $38,260.

A classified balance sheet means that current assets and current liabilities are expected to be consumed or paid of in one (1) year or less.

Long term assets and long term liabilities have a "life" or expected conversion to cash in more than one (1) year.

In this case, all of you are doing is MOVING $38,260 from the long term liability account called "Bank loan payable" to

a new account called "Bank loan payable - current portion":

This new account has been added to the bottom of the accountant's worksheet by me (to assist you).

By the way, where did I get the account names like Bank loan payable - current portion; I made it up. These are the books and records

of our company and we get to name the accounts as we see fit (within reason) so that they are clear to the readers of the financial statements.