Should the debt be reclassified? Victor Brannon, senior accountant for Moose Corporation, was preparing the latest financial ratios. He knew that the ratios were watched carefully by Moose...

Should the debt be reclassified?

Victor Brannon, senior accountant for Moose Corporation, was preparing the latest financial ratios. He knew that the ratios were watched carefully by Moose Corporation’s lenders due to strict loan agreements that required the corporation to maintain a minimum current ratio of 1.5. Victor knew that the past quarter’s financial ratios would not meet the lenders’ requirements. His boss, Cara Romano, suggested that Victor classify a note payable due in 11 months as a long-term liability. What should Victor do? What would you do?