 In this presentation, we will take a look at the financial statements focusing on the balance sheet and the current and long-term portion of the notes payable. Support accounting instruction by clicking the link below, giving you a free month membership to all of the content on our website, broken out by category, further broken out by course. Each course then organized in a logical, reasonable fashion, making it much more easy to find what you need then can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files and more like QuickBooks backup files when applicable. So once again, click the link below for a free month membership to our website and all the content on it. This time we're going to have two notes payable that we have here and we're only going to be having one account on the trial balance that will be totaling up those notes payable and then we'll discuss how to record that on the financial statements on the balance sheet. Our focus here being on the breaking out of the current and long term portion of these notes. So again, there's a few different options we can have for how we're going to deal with these notes on the financial statements. In this case, we need to break them out between the short term and long term portion and the short term portion represents just those amounts that are due within 12 months and we have these installment notes where we make monthly payments. So we're going to pay some of it in 12 months and some of it beyond that 12 month period. Once we start getting more than just one note out there and some companies have a lot of different loans out there, then the question is, well, how's best to track this? There's a couple of different options for us to track this information. This way, one way we can do it is we could say, well, we have two loans here and we just represent that with one loan payable account on the trial balance. And then we're just going to have like a subsidiary information to back up and support this loan payable amount on the trial balance. One reason this is beneficial is that we can then make the financial statements which typically just want one account on them from the trial balance, meaning if we have a lot of loans on there, when we make the financial statement for users that are outside the company, they probably don't want to see the detail of all the loans, they just want to see one number. We still have a problem of breaking up the short term and long term portion, however. So in this case, what we're going to do is take this amount here and just use that to track all the loans, but we're still going to have to break it out between a short term and long term portion. So here's our two loans on the left. We're going to say that this is our amortization table. And it happens to be that the third payment is where we are at for this loan, and this is where we are at the seventh payment for this loan. So in other words, the balance as of the end of the time period represents 92.655 for this loan, and it represents the 36.112 for this loan. If we add those two up, I'm holding down control and highlighting those two. It's 128.767, and that's what should be here, 128.767. So that represents the total balance. But there's a short term and long term portion now. So this is easy to tie out to the total. Now we need to break out each of these loans into the short term and long term portion. Again, we're not going to break it out by payment. Short term just means 12 months out. Payments would be adding up all of these. So the actual payments, 12 of them here, would add up to 38.160. But we haven't incurred the interest yet. We can only add up the principal. So it's going to be all of these numbers. So if I sum that up to the left, to the right here, we're going to say equals the sum of, and we're going to take all of these principal numbers for 12 of them. And that's the 31.832. Or in other words, we've got this is where we're going to be at after 12 payments. This will be the balance that will still be due. So therefore, as of this date, this balance will be the long term portion 12 months later. And the difference between this and this is the current portion 31.82. For this loan, we've had the loan has been out for a little bit longer here. And we're currently here. This is where the end date is on the amortization table. So this is where the loan should be. This is where it's at. This is what we owe as of the cutoff date of our financial statements. And if we go principal 10 or 12 months out, we're making monthly payments on the principal. It's going to be down to 7100. So if we go here in M29 equals the sum, and we add up all those payments that we're going to make just the principal portion, it adds up to 7100. In other words, this is where we're at now in terms of total. This is where we will be at after 12 payments in total. The difference between those two is the current portion of 7100. So now we just need to break out on our loan over here, the current portion, which is going to be this plus this, and then the long term portion, which will be the remaining this, which will be this and this. We could do that with a little worksheet here. We could say that the current portion, and we could take the loan numbers, say that we're going to say the loan numbers are going to be this loan and this loan. I'm just pulling that. You can just type these in there. Those are going to be the loan numbers. The current portion is going to be equal to for the first loan, this amount. And for the second loan, we're going to pick up the current portion, which will be this amount. And then the long term, let's make it short term and long term. It's going to be the same two loans. So between this one and this one, the long term for the first loan is going to equal what's still left at the end of there from that amortization table. On the second loan, it'll be equal what's still left. So let's give us a little bit more space here. So if we say total short term is going to equal the sum of these two. And then if we say total long term, it's going to equal the sum of these two. And so then the total loans is going to equal the short term portion and the long term portion. So that's what we'll have here. We'll give that a double underline. Okay, so that's going to be the long term 12867 is what it's here. We're breaking those out now with our little worksheet. These two amounts then are the two amounts that we want to have on our financial statements. So those are the ones we're going to be using. So this is the amount on the trial balance. Those are the amounts on the financial statements. So if we go back over here, then short term portion is just going to equal our worksheet short term portion. And then the long term portion is going to equal our worksheet on the long term portion. And that'll break out the short term and long term that'll put us back in balance. So that works and that's a good system. Note that this number though, we couldn't just pull this over and make the financial statements from it because we had to break it out. If we wanted to, we could try to break this out on the financial state on the trial balance and make it easier for the system to just pull over and we'll take a look at an example like that as well.