Question

bear corp. has $100,000 cash in the bank restricted to repay a note payable that matures in 2 years. how should this $100,000 be reported?

Answer 1

It should be reported as a restricted cash in the long-term section of the company balance sheet.

What is note payable?

Note payable  can be defined a the money a company or an organization owes or the money they are expected to payback..

Note payable is classified as long term liabilities. Hence, the cash amount of $100,000 should be reported or recorded in the balance sheet as a restricted cash.

Therefore  the $100,000 is reported as a restricted cash.

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