On December 31, 2018, Barry Company borrowed $500,000 by signing a five-year, 8% note payable. The note is payable in five yearly installments of $100,000 plus interest, due at the end of every year beginning on December 31, 2019. What amount represents the current portion of Long-term Notes Payable at December 31, 2018?
What will be an ideal response?
The current portion of notes payable is the principal amount that will be paid within one year.
Therefore, Principal Amount = $500,000
Current portion of Long-term Notes Payable = $500,000 / 5 years = $100,000
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