Branch Company, a building materials supplier, has $17,400,0…
Branch Company, a building materials supplier, has $17,400,000 of notes payable due April 12, 2028. At December 31, 2027, Branch signed an agreement with First Bank to borrow up to $17,400,000 to refinance the notes on a long-term basis. The agreement specified that borrowings would not exceed 85% of the value of the collateral that Branch provided. At the date of issue of the December 31, 2027, financial statements, the value of Branch’s collateral was $19,400,000. On its December 31, 2027, balance sheet, Branch should classify the notes as: