Accounting: Tools for Business Decision Making, 5th Edition

by Kimmel, Paul D.; Weygandt, Jerry J.; Kieso, Donald E.

Published by Wiley

ISBN 10: 1118128168

ISBN 13: 978-1-11812-816-9

Chapter 10 - Reporting and Analyzing Liabilities - Questions - Page 541: 2

Answer

The note payable has been signed on July 1 for a period of 6 months. This is payable on December 31. As on 30th September, when the year ends

Work Step by Step

The note payable is due for payment after 3 months - so it is a current liability. · Interest is accrued for the period from July 01 to September 30 (3 months), amounting to 450 dollars. This Interest payable should also be shown as current liability.

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