The following items are listed as liabilities on the balance sheet of Eleutherios Company on December 31,

Question:

The following items are listed as liabilities on the of Eleutherios Company on December 31, 2008.
Accounts payable ... $ 420,000
Notes payable ..... 750,000
Bonds payable .... 2,250,000
The represent obligations to suppliers that are due in January 2009. The notes payable mature on various dates during 2009. The bonds payable mature on July 1, 2009.
These liabilities must be reported on the in accordance with generally accepted accounting principles governing the classification of liabilities as current and noncurrent.

Instructions
(a) What is the general rule for determining whether a liability is classified as current or noncurrent?
(b) Under what conditions may any of Eleutherios Company’s liabilities be classified as noncurrent? Explain your answer.

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