1st blank choices:

a) current liability

b) long-term liability

c) note closure only

2nd blank choices:

a) GAAP states that even if the funds used to retire short-term debt are replaced, the liability is still recorded as a current liability

b) the current liability was replaced with long-term borrowing before the financial statements were issued and GAAP permits reporting the liability as long-term

c) the debt has been paid and can be removed from the financial statements

BOTH blank choices are the same for 1. and 2.

.

Short-Term Debt Expected to Be Refinanced Several times during 2019, Palmer Company issued short-term commercial paper totaling $7 million. On December 31, 2019, the company's year-end, Palmer intends to refinance the commercial paper by issuing long-term debt. However, because Palmer had excess cash, $3 million of the liability is liquidated in February 2020 as the commercial paper matures. On March 1, 2020, Palmer issues $9 million of long-term bonds, with $3 million of the proceeds going to replenish the working capital used to liquidate the $3 million of commercial paper, $4 million to pay the remaining balance of the commercial paper due after April, and the remaining $2 million to finance an equipment modernization program at Palmer's plant. Palmer's December 31, 2019, year-end financial statements are issued on March 13, 2020. Required: 1. The $3,000,000 will be reported as a because 2. The $4,000,000 will be reported as a because Short-Term Debt Expected to Be Refinanced Several times during 2019, Palmer Company issued short-term commercial paper totaling $7 million. On December 31, 2019, the company's year-end, Palmer intends to refinance the commercial paper by issuing long-term debt. However, because Palmer had excess cash, $3 million of the liability is liquidated in February 2020 as the commercial paper matures. On March 1, 2020, Palmer issues $9 million of long-term bonds, with $3 million of the proceeds going to replenish the working capital used to liquidate the $3 million of commercial paper, $4 million to pay the remaining balance of the commercial paper due after April, and the remaining $2 million to finance an equipment modernization program at Palmer's plant. Palmer's December 31, 2019, year-end financial statements are issued on March 13, 2020. Required: 1. The $3,000,000 will be reported as a because 2. The $4,000,000 will be reported as a because