Acc422 Intermediate Accounting: E13-3 On December 31, 2007, Hattie McDaniel Company

Acc422 Intermediate Accounting
Week 5
E13-3 Refinancing of Short-Term Debt
On December 31, 2007, Hattie McDaniel Company had $1,200,000 of short-term debt in the form of notes payable due February 2, 2008.
On January 21, 2008, the company issued 25,000 shares of its common stock for $38 per share, receiving $950,000 proceeds after brokerage fees and other costs of issuance.
On February 2, 2008, the proceeds from the stock sale, supplemented by an additional $250,000 cash, are used to liquidate the $1,200,000 debt.
The December 31, 2007, balance sheet is issued on February 23, 2008.

Instructions
Show how the $1,200,000 of short-term debt should be presented on the December 31, 2007, balance sheet, including note disclosure.
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