How much presented as current liability in relation to loan

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Problem 1: On January 1, 20x1, DOLEFUL SAD Co. took a 3-year, ?4,000,000 loan from a bank. The loan agreement requires DOLEFUL to maintain a current ratio of 2:1. If the current ratio falls below 2:1, the loan becomes payable on demand. As of December 31, 20x1, DOLEFUL's current ratio is 1.8:1. On December 31, 20x1, the bank agreed not to collect the loan in 20x2 and gave DOLEFUL 12 months to rectify the breach of loan agreement. How much is presented as current liability in relation to the loan in DOLEFUL's 20x1 year-end financial statements?

a. 4,000,000 b. 200,000 c. 4,200,000 d. 0

Reference no: EM132774745

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