This continues the Fitness Equipment Doctor, Inc., example from the Continuing Problem in Chapter 8. Fitness Equipment Doctor, Inc., purchased some of its long-term assets during 2016 using long-term debt. The following table summarizes the nature of this long-term debt. Assume the fiscal year ends on December 31.

Requirements

1. Calculate the interest expense that Fitness Equipment Doctor, Inc., should accrue as of December 31, 2016. Round your answer to the nearest dollar. Use 365 days for the note payable (ignore leap year).

2. Prepare the balance sheet presentation at December 31, 2016, for all long-term debt indicating the portion that should be classified as current and the portion that should be classified as long-term?

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Annual Interest Item Note payable Amount Payment Terms Date Mar 18 Rate 8% $35,800 Four equal annual payments of principal plus accrued interest are due on Mar 18 of each year. Semiannual payments of $4,391 due on February 1 and August 1 of each year. 5% $135,000 Mortgage payable Aug 1