Question

On September 1, 2021, Southwest Airlines borrows $39.3 million, of which $6.6 million is due next year. Show how Southwest Airlines would record the $39.3 million debt on its December 31, 2021, balance sheet. (Enter your answers in dollars, not millions. For example, $5.5 million should be entered as 5,500,000.)

Answer 1

Balance sheet

Current liability:

Current portion of long term debt = $6,600,000

Long term liability:

Notes payable = ($39,300,000 - $6,600,000)

= $32,700,000

Therefore,

Total liabilities = Current liabilities + Long term liabilities

= $6,600,000 + $32,700,000

= $39,300,000