On December 31 of This Year, a Company Purchases a Building

Multiple Choice

On December 31 of this year, a company purchases a building by paying $50,000 and executing a mortgage payable of $450,000. The mortgage is payable in 10 equal principle payments, plus interest, at the end of each of the next 10 years. How will the mortgage be reported on the December 31 balance sheet at the end of the first year?

A) Current liability of $450,000
B) Current liability of $90,000 and long-term liability of $360,000
C) Current liability of $45,000 and long-term liability of $405,000
D) Long-term liability of $450,000