On December 31, 2025, Sheridan Company has $6,976,000 of short-term debt in the form of notes payable to Gotham State Bank due in 2026. On December 28, 2025, Sheridan enters into a refinancing agreement with Gotham that will permit it to borrow up to 64% of the gross amount of its accounts receivable. Receivables are expected to range between a low of $5,984,000 in May to a high of $7,970,000 in October during the year 2026. The interest cost of the maturing short-term debt is 15%, and the new agreement calls for a fluctuating interest at 1% above the prime rate on notes due in 2030. Sheridan’s December 31, 2025, balance sheet is issued on February 15, 2026.
Prepare a partial balance sheet for Sheridan at December 31, 2025, showing how its $6,976,000 of short-term debt should be presented. (Enter account name only and do not provide descriptive information.)
SHERIDAN COMPANY
Partial Balance Sheet
choose the accounting period
December 31, 2025
Correct answer
select an opening name for section one
Current Liabilities
Correct answer:
enter a balance sheet item
Notes Payable
Correct answer
$enter a dollar amount
Incorrect answer
select an opening name for section two
Long-term Debt
Correct answer:
enter a balance sheet item
Notes Payable
Correct answer
enter a dollar amount
Incorrect answer
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List of Accounts
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