Solution: Company has a mortgage loan payable and is required to make monthly payments of $3,000 per month. Each of the monthly payments includes a $2,850 principal payment plus approximately $1,50 of interest. This means that during the next 12 months, the company will be required to repay $34,200 ($2,850 x 12 months) of principal. The necessary principal payments due within one year of the balance sheet date must be reported as a current liability. The remaining principal of $252,800 ($287,000 minus $34,200) will be reported as a long-term liability, because it is not due within one year of the balance sheet date.

It can find the amount of principal due within the next year by reviewing the loan amortization schedule for each loan or by asking your lender. Payment Frequency | Payment Amount | Amortization | Term

Interest

Cost | Amortization

Interest

Cost | Amortization Interest Savings vs. Monthly Payment | Monthly | $1,531.70 | 30.0 yrs | $264,405.61 | $264,405.61 | $0.00 | Semi-monthly | $765.85 | 30.0 yrs | $263,106.20 | $263,106.20 | $1,304.06 | Bi-weekly | $706.94 | 29.8 yrs | $260,590.43 | $260,590.43 | $3,819.83 | Weekly | $353.47 | 29.8 yrs | $260,001.73 | $260,001.73