D is corrent. The requirement is to determine the amount that should be included in the current liability section of the balance sheet. The accounts payable and the bond payable are classified as current liabilities because they are due within the next 12 months. The bond payable is valued at its carrying value of $285,000 ($300,000 – $15,000 discount). The deferred income tax liability is classified as a current liability because it not related to an asset and it is expected to reverse in the next 12 months. D is corrent because the amount of current liabilities is equal to $390,000 ($80,000 + $285,000 + $25,000).
A is incorrect because it incorrectly increases the current liability by the discount amount and it fails to consider the deferred tax liability.
B is incorrect because the deferred tax liability is also classified as a current liability because it not related to an asset and it is expected to reverse in the next 12 months.
C is incorrect because it incorrectly increases the current liability by the discount amount instead of decreasing the current liability by the discount amount.
