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Long Term Debt

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ACME Company's fiscal year ends on December 31. At the end of the first quarter on March 31, ACME owes $40,000 on a vehicle loan that matures in three years. In each of the next four quarters, ACME will be making quarterly payments of $3,000, of which $500 is interest. The amount of the loan balance that should be classified on the balance sheet under Long-term liabilities is:

1. $10,000
2. $12,000
3. $30,000
4. $40,000

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The solution does a great job of answering the question. The solution is brief and concise and very easy to follow along. All the steps are clearly shown. It can be easily understood by anyone with a basic understanding of Accounting. Overall, an excellent solution.

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(3) 30,000 is the correct answer.

The actual loan amount that will be paid ...

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