Lannister Inc. signed a $54,000 7% 15-year installment note on December 1, 2018. The note requires quarterly payments of $900 plus interest on March 1, June 1, September 1, and December 1 of each year. How will Lannister classify this loan on its December 31, 2018 Balance Sheet?
A) Current Portion of Long-term debt, $1,800; Long-term debt, $52,200
B) Current Portion of Long-term debt, $3,600; Long-term debt, $50,400
C) Current Portion of Long-term debt, $900; Long-term debt, $53,100
D) Current Portion of Long-term debt, $2,700; Long-term debt, $51,300
B) Current Portion of Long-term debt, $3,600; Long-term debt, $50,400
Explanation: quarterly payment × 4 = current portion; note amount - current portion = long-term amount. Ex: $900 × 4 =$3,600 current; $54,000 - $3,600 = $50,400 long-term
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