Raffie’s Kids, a nonprofit organization that provides aid to children in foster care, has a 30-year, 5% mortgage on the existing building. The mortgage requires monthly payments of $3,000. Raffie’s Kids’ bookkeeper is preparing financial statements for the board and, in doing so, lists the mortgage balance of $287,000 under current liabilities because the board hopes to be able to pay the mortgage off in full next year. Of the mortgage principal, $20,000 will be paid next year if Raffie’s Kids pays according to the mortgage agreement. The board members call you, their trusted CPA, to advise them on how Raffie’s Kids should report the mortgage on its balance sheet. What is the ethical issue? Provide and discuss the reason for your recommendation.
at least 200 words.