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On December 31, Year 1, Taylor, Inc. signed a binding agreement with a bank for the refinancing of an existing note payable scheduled to mature in February, Year 2. The terms of the refinancing included extending the maturity date of the note by three years. On January 15, Year 2, the note was refinanced. How should Taylor report the note payable in its December 31, Year 1, balance sheet?

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Answer

The note must be reported on the balance sheet as of December 31 for the total outstanding value, since the refinancing does not change the value to be paid only affects the terms and interests, also the financing will only be made in January of year 2

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