Question: reunion bbq has 4000000 of notes payable due on march...

Reunion BBQ has $4,000,000 of notes payable due on March 11, 2017, which Reunion intends to refinance. On January 5, 2017, Reunion signed a line of credit agreement to borrow up to $3,500,000 cash on a two-year renewable basis. On the December 31, 2016, balance sheet, Reunion should classify:

Multiple Choice

• $500,000 of notes payable as short-term and $3,500,000 as long-term obligations.

• $500,000 of notes payable as long-term and $3,500,000 as short-term obligations.

• $4,000,000 of notes payable as short-term obligations.

• $4,000,000 of notes payable as long-term obligations.