Question
A dental organization has $725,000 as an outstanding loan, for which the principal must be paid at the rate of $150,000 for the next 5 years.
A dental organization has $725,000 as an outstanding loan, for which the principal must be paid at the rate of $150,000 for the next 5 years. In the balance sheet, what would be the current portion of long-term debt and what is the remaining debt?
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The current portion of long-term debt would be the amount of the outstanding loan that is due within the next year. Since the principal must be paid at the rate of $150,000 per year for the next 5 years, the current portion would be $150,000.
The remaining debt would be the total outstanding loan minus the current portion. Therefore, the remaining debt would be $725,000 - $150,000 = $575,000.
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