1. Jade Larson Antiques owes $20,000 on a truck purchased for use in the business. The company makes principal payments of $5,000 each year plus interest at 8%. Which of the following is true?
a. After the first payment is made, the company owes $15,000 plus three year’s interest.
b. After the first payment, $15,000 would be shown as a long term liability.
c. After the first payment is made, $5,000 would be shown as the current portion due on the long term note.
d. Just before the last payment is made, $5,000 will appear as a long term liability on the balance sheet.
2. Sydney Park Fitness Gym has Unearned revenue of $10,000, Salaries payable of $15,000, and Allowance for uncollectible accounts of $5,000. What amount would Sydney report as Total current liabilities?
a. $30,000
b. $25,000
c. $20,000
d. $15,000