On September 1, 2021, Southwest Airlines borrows $40.3 million, of which $8.6 million is due next year. Show how Southwest Airlines would record the $40.3 million debt on its December 31, 2021, balance sheet. (Enter your answers in dollars, not millions. For example, $5.5 million should be entered as 5,500,000.)

Answer and Explanation:

The presentation of the liabilities side of the balance sheet is presented below:

Southwest Airlines

Liabilities side

Balance sheet

Current liability

Current portion of the long term debt $8,600,000

Long term liability

Notes payable $31,700,000 ($40,300,000 - $8,600,000)

Total liabilities $40,300,000