Classification of Short Term Loans to Be Refinanced
The company has the following three loans payable scheduled to be repaid in June of next year. As of December 31 of this year, identify which of the three should be classified as current and which should be classified as noncurrent.
(a) The company intends to repay Loan A when it comes due in June. In the following September, the company intends to get a new loan of equal amount from the same bank.
(b) The company intends to refinance Loan B when it comes due. The refinancing contract will be signed in May after the financial statements for this year have been released.
(c) The company intends to refinance Loan C when it comes due. The refinancing contract will be signed in January before the financial statements for this year have been released.