On December 31, 2006, Frye Co

Multiple Choice

On December 31, 2006, Frye Co.has $2,000,000 of short-term notes payable due on February 14, 2007.On January 10, 2007, Frye arranged a line of credit with County Bank which allows Frye to borrow up to $1,500,000 at one percent above the prime rate for three years.On February 2, 2007, Frye borrowed $1,200,000 from County Bank and used $500,000 additional cash to liquidate $1,700,000 of the short-term notes payable.The amount of the short-term notes payable that should be reported as current liabilities on the December 31, 2006 balance sheet which is issued on March 5, 2007 is

A) $0.
B) $300,000.
C) $500,000.
D) $800,000.