Wolfe Company Has a 5-Year Mortgage for $120,000 Which Requires

Multiple Choice

Wolfe Company has a 5-year mortgage for $120,000 which requires 4 equal payments of principal plus interest. In the first year of the mortgage, Wolfe will report this liability as a:

A) current liability of $120,000.
B) long-term liability of $120,000.
C) current liability of $90,000 and a long-term liability of $30,000.
D) current liability of $30,000 and a long-term liability of $90,000.