Short-Term Debt Expected to Be Refinanced
Response to the following problem:
On December 31, 2010, Excello Electric Company had $1 million of short-term notes payable due February 7, 2011. Excello expected to refinance these notes on a long-term basis. On January 15, 2011 the company issued bonds with a face value of $900,000 at 98; brokerage fees and other costs of issuance were $3,450. On January 22, 2011 the proceeds from the bond issue plus additional cash held by the company on December 31, 2010 were used to liquidate the $1 million of short-term notes. The December 31, 2010 balance sheet is issued on February 12, 2011.
Required
Prepare a partial balance sheet as of December 31, 2010 showing how the $1 million of short-term notes payable should be disclosed. Include an appropriate footnote for proper disclosure.