Accounting


Accounting Forum

AccountingCoach.com is the world's largest free online accounting course.


Not signed in (Sign In)

Categories

Vanilla 1.1.7 is a product of Lussumo. More Information: Documentation, Community Support.

Welcome Guest!
Want to take part in these discussions? If you have an account, sign in now.
If you don't have an account, apply for one now.

General Accounting Discussions: Current portion of long-term debt

Bottom of Page

1 to 2 of 2

  1.  
    • CommentAuthorkringli
    • CommentTimeOct 30th 2007
     
    Hi, I have just started a new accounting position for a manufacturing company. Before I issue the financial statements I need to determine the current portion of long-term debt. The company has a line of credit that has been ongoing and is also automatic in that when the checking account gets low the bank automatically makes a transfer and also automatically takes payments when there are sufficient funds. Management's viewpoint is that the entire LOC should be considered long-term debt. I can agree to a point in that there is not necessarily any portion of the principal due. In addition, because of this, how would I calculate current portion? Any insight on this would be extremely helpful!!

    Thanks!!
    • CommentAuthorneo
    • CommentTimeOct 30th 2007 edited
     
    Hi!

    First, determine the terms of the agreement. It is vital in determining the amount.

    The current portion of the debt is the amount the the firm is expecting to be settled within twelve months of the balance sheet date (normally).

1 to 2 of 2

  1.  



 

Why AccountingCoach.com?

the accounting coach

AccountingCoach.com is designed to help people without an accounting background easily understand accounting concepts at no cost.


By investing thousands of hours, we have created clear and concise accounting information for both business people and students of all ages.


We understand how difficult accounting can be. That's why we have ensured that each accounting topic includes a clear explanation, reinforcing drills, Q&A, puzzles, dictionary of terms, etc.


Read 1,402 Visitor Testimonials



What's on AccountingCoach.com?