Question

If a cut flower grower has a $500,000 mortgage on her land and buildings, and she owes Farm Credit Service $60,000 for this year's mortgage payment, what amount should be entered on the current liability line of the financial statement?

Answer 1

The amount of $60,000, which the grower owes for this year's mortgage payment, should be entered as a current liability on the financial statement.

Step-by-step explanation:

The question is asking about a financial statement entry for current liabilities. In accounting, current liabilities include debts or obligations that are due within one year.

Since the grower owes Farm Credit Service $60,000 for this year's mortgage payment, this is the amount that should be entered on the current liability line of the financial statement.

This is because it is a short-term debt that the grower is obligated to pay within the current fiscal year.