Reference no: EM132764578

Included in Be Grateful Company liability account balances at December 31, 2018 were the following:

20% note payable issued in October 1, 2017

maturing September 30, 2020 2, 500, 000

18% Notes payable April 1, 2018

maturing April 1, 2019 4, 000, 000

Be Grateful Company's December 31, 2018 financial statements were issued on March 1, 2019.

Problem 1: On January 15, 2019, the entire P4, 000, 000 balance of 18% note was refinanced by issuance of a long-term obligation payable in a lump-sum. In addition, on March 10, 2019. Be Grateful Company consummated a non-cancellable agreement with the lender refinance the 20%, P2, 500, 000 note on a long-term basis, on readily determinable terms that have not yet been implemented. Both parties are financially capable of honoring the agreement's provisions. On December 31, 2018, balance sheet, the amount of the notes payable that Be Grateful should classify as current liability?

a. P-0-

b. P6, 500, 000

c. P2, 500, 000

d. P4, 000, 000