McAfee Corporation borrowed $20 million to finance the construction of a new building. In addition to the annual interest that is not included in the face, one-tenth of the principal amount borrowed is to be repaid each year. If the borrowing occurred one month prior to year end, how should the loan be presented on the upcoming balance sheet?
Eighteen million dollars of the loan should be classified as a long-term liability. The first $2 million principal repayment should be classified as a current liability because it will be repaid within a year of the balance sheet date.
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Answer the following statement true (T) or false (F)
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Indicate whether the statement is true or false
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