 In this presentation, we will take a look at financial statements of the balance sheet focusing in on current and long-term portion of 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. We're going to have the amortization tables on the left two notes payables we will be dealing with. This time in terms of the trial balance, we're going to be recording these notes in terms of the notes separately and have a short term and long term portion between the two notes, meaning in this form at the benefit here is that we can now have a separate loan number and we can be tracking these separately on the trial balance along with however many loans we have, which is nice because then we can tie it out to the to the amortization table as we go and we can also break out a short term and long term portion, which can be difficult to do and add a lot of counts to the trial balance, but can be a way that we can also tie this out to the trial bound to the financial statements and kind of link all the cells together and probably possibly make the financial statements a little bit more easily just from the information on the trial balance. So what we're going to do here is we're going to have we have two loans on the trial balance. We're going to have a short term portion and a long term portion between the two loans. So short term, long term, short term, long term, and then the loans will be represented by the loan payable and then the last four digits of say the account numbers, one way to kind of indicate an easy way to indicate on a trial balance or something like that so that you can see the see what those loans are in a fairly easy way. And then what we need to do of course over here is take that information and break it out into the short term and long term portion of our balance sheet. So we've got our quick little balance sheet that just having something in balance so we could see something in balance taking our trial balance numbers here converting them into a plus and minus format. We have our total assets and then we're focusing here on the liabilities and then of course the equity is all these accounts. Once we put the short term and long term portion of our loans in our total assets will equal liabilities plus equity. So our goal here is to break out the short term and long term portion. Now it's already basically done here once we get these amounts set up because the short term will just be this number for the short term account and this number for this short term account. So we'll just be able to combine those accounts in the in the financials for the short term and long term portion. The problem here is of course that when we do this in a trial balance week, we're not always going to be able to keep these accounts in a short term and long term proportion as we make payments or at least that's not very easily done because all the payments have a different amount of principal and interest. So if we do it in this format, we're probably going to have to make this adjustment at the end of each time period, meaning as we go through the payments of the payments of making loans, we can tie out this amount to the amortization table. So we could say, okay, here's our two amortization tables. As of now we've made three payments. This is the amount that's due on this first loan. So this amount we could tie out to our trial balance very easily because, okay, that number ties out. But we can't break out the short term and long term portion very easily because that'll change as each payment is made. So we could do it, but it'd be a little bit more tedious for us to do that each payment. It would make more sense for us to do that at the end. And as we make payments, just tie it out to the total amount. So that'll just be the same for the second loan. The second loan, we could see that we have the total amount. This is where we are at as of the cutoff date is here. And that's what's on the trial balance, but it's only one account right now. And then we'd have to make periodic adjustments at the end. So as we go through, we say, hmm, this ties out. I can tie it out with each payment. And then at the end, I'm going to break out the short term and long term portion at the cutoff date. The date we make the financial statements into the month or into the year. And that's what we'll do here. So it's same process. We're going to say that this is where we are at for loan one. This is where we are at. Current portion is just a 12 months of principal only, not the total payments, but only the principal. So we were to add up 12 months of principal according to this amortization table. It adds up to 3182, which is this amount here. Also calculated as current amount we are at now. This is how much we owe now. This is how much we will owe after 12 months. The difference between those two also being the 3182. If we go to the second loan, we're going to say that this is where we are at now. Current portion is 12 months of the principal payments. It's going to be these amounts, which is also could be calculated as this is what we owe now. This is what we will still owe after 12 months after making these payments. The difference between the two being our short term portion. So these two then are going to be the short term. These two are the long term for our two loans. If we break that out on our worksheet then, we're going to say the short term and the long term, that's what we need to break out on the financial statements. So we're going to say short term for loan one is this amount. Short term for loan two is this amount. If we add those up, we get the total. And then if we go to the long term, long term for loan one is this amount. Long term for loan two is this amount. And if we sum those up, now we have the short term and long term. And if we add up the total then for what we owe in terms of loans, it's going to be the short term and the long term. So these amounts are what we have to actually tie out. So this 128, 767 is in total what we owe. On the trial balance, it's broken out by the loans. So this plus this as of 128, 767, we want to break it out to short term and long term portion per loan. So this 92656 is this number and this number. We're going to break that out into the short term and long term portion for that particular loan. So to do that, it's all here. So we got to make this go down and put the long term portion into the long term portion. This is a credit balance. We're going to do the opposite thing to it, a debit to make it go down. So we'll right click and copy this and paste that on our first journal entry. And the amount is just going to be the long term portion of our first loan. So we can get that from the worksheet. So the long term portion of our first loan is this amount here. And so the credit is going to be the same. And we're just going to put that into the long term portion. So I'll copy that, put that underneath, right click and paste 123. Home tab, alignment, increase in denting. And then if we post this out then, we're going to post the short term here. So this equals the 61573, bringing the balance to 3182. That's the short term portion. So that's what we want. In the long term portion, we'll go here in U7 equals this 61573. There's the long term portion. So here's the long term portion. And then, of course, if we were to highlight both of those, 92, 655, that's the amount on the amortization table as of now. Okay, then the second one, we'll do the same thing for this loan. It's all in short term, we need to break out the long term portion. So this needs to go down, so we'll do the opposite thing to it. It's a credit, we'll debit it. So right click and copy, we'll put that on top. In the debit side, this is going to equal. And we're going to go down to our financials. We're breaking out the long term of the second loan now, which is this 2912. And we're going to credit the same amount into the long term. So we're going to put it in here, copy the long term, put that underneath, right click and paste 123, indent, home tab, alignment, increase, indenting. And then we'll just post this out. So here's the short term, here it is here. We're going to post it to U8 equals the 2912 and enter brings the balance to 7,100. That's going to be our short term portion for the second loan. And then the second amount, the long term portion, we'll go right underneath it in U9 equals the 2912 and enter. So there's the 2912, that's the long term portion here. And of course, if we were to take both of those, adds up to 3612. That's the amount on our amortization table that we owe as of now. So now we've got a lot of detail on our trial balance, which is nice. Note that breaking this out is beneficial because of this detail. One is that we can track this information to the amortization tables as we make the loans. However, it's going to be difficult to do that to break out the short term and long term portion each time because it'll be tedious for us to do each time. So if we do it this way, we probably want to put these back into one account after we make the financial statements. So that we can track it in one account as we make the payments and then break it out on a monthly or yearly basis as needed. The reason it's beneficial for the financial statements is it might be possible for us to set the system up to combine these two accounts in a proper way. So the system will just make the financial statements directly from the trial balance without us having to go back in there and read and adjust it in some format outside of the system. Meaning financial software possibly will be able to just print this report. How will the current portion here is just going to be, I'm going to say negative to flip the sign. It should be able to just pull from the short term and the short term. So we already have those numbers there. We just need to tell the system to pull from those accounts and enter. And then the long term portion will be here. You might notice that I just changed the blue cell it was here. It should be here and we're going to pull that from the long term. So I'm going to say negative and flip the sign and we're just going to pick up the long term cells which will be this one minus this one. So I'm just flipping the sign that plus that flipping the sign. And so there we have it. So that should put us in balance. So now total assets equal liabilities plus equity. And we've broken out the short term and long term and we didn't have to make any changes to it. We just took it directly from here. We just had to tell the system which accounts to combine in order to do that.