On November 1, 2017, a company signed a promissory note. The interest and principal are due on July 1, 2018. What accounts relating to the note payable will be reported on the financial statements for the fiscal year ending December 31, 2017?
A)Short-term notes payable will be reported on the balance sheet and interest payable will be reported on the income statement.
B)Interest receivable will be reported on the balance sheet.
C)Short-term notes payable and interest payable will be reported on the balance sheet.
D)Short-term notes payable, interest payable and interest expense will be reported on the balance sheet.

Question

Quizplus · Accepted Answer

The short-term notes payable will be reported as a liability on the balance sheet, and the interest payable, which has accrued by December 31, 2017, will also be reported on the balance sheet. Interest expense will be reported on the income statement, not the balance sheet.

On November 1, 2017, a Company Signed a Promissory Note