At December 31, 2011, Reed Corp

At December 31, 2011, Reed Corp. owed notes payable of $1,000,000 with a maturity date of April 30, 2012. These notes did not arise from transactions in the normal course of business. On February 1, 2012, Reed issued $3,000,000 of ten-year bonds with the intention of using part of the bond proceeds to liquidate the $1,000,000 of notes payable. Reed's December 31, 2011, financial statements were issued on March 29, 2012. How much of the $1,000,000 notes payable should be classified as current in Reed's balance sheet at December 31, 2011?

A) $0
B) $100,000
C) $900,000
D) $1,000,000

Correct Answer:

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