The controllers of Sage Hill, Inc. and Sheffield Corp. both ask you whether their companies can reclassify short-term obligations as long-term. Here are the facts surrounding both companies short-term debt. Sage Hill, Inc. On December 31, 2017, Sage Hill, Inc. has $2,120,000 of short-term debt in the form of notes payable to Michaels State Bank due February 5, 2018. On January 28, 2018, Sage Hill issued 21,200 shares of common stock at $75 per share. Sage Hill used the proceeds of $1,590,000 from the stock issuance, along with $689,000 in cash to retire the short-term debt and associated accrued interest on February 5, 2018. Sage Hill will issue its December 31, 2017 financial statements on February 25, 2018 Sheffield Corp. On December 31, 2017, Sheffield Corp. has $3,180,000 of short-term notes payable to Indiana Bank & Trust. The notes are due on January 31, 2018. Sheffield retired the notes, along with $212,000 in accrued interest, in full on January 31, 2018. On February 11, 2018, Sheffield obtained $4,770,000 in long-term financing from Terre Haute Bank &Trust. The new debt bears interest at 5 percent, with interest payments due annually. Sheffield will issue its December 31, 2017 financial statements on February 28, 2018 Prepare partial balance sheets for Sage Hill, nc. and Sheffield Corp. at December 31, 2017, showing how both companies' short-term debt should be presented, including footnote disclosures. account name and do not provide descriptive information.)