the financing agreement stipulated that borrowings may not exceed 80 of the value of 604423

Ames, Inc. has $500,000 of notes payable due June 15, 2007. Ames signed an agreement on December 1, 2006, to borrow up to $500,000 to refinance the notes payable on a long-term basis with no payments due until 2007. The financing agreement stipulated that borrowings may not exceed 80% of the value of the collateral Ames was providing. At the date of issuance of the December 31, 2006 financial statements, the value of the collateral was $600,000 and is not expected to fall below this amount during 2007. In Ames’ December 31, 2006 balance sheet, the obligation for these notes payable should be classified as

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