On 1 December 2015 Morgan Smith Ltd issued a three-month,$50 000 bills payable to Northport Savings & Loan in order to borrow $48 500.If the bills payable is still outstanding at 31 December 2015,which of the following will be reported on Morgan Smith's financial statements concerning the bill?
Interest expense Unexpired interest Bills payable
On bills

Question

Quizplus · Accepted Answer

Interest expense will be recognized for the month of December, unexpired interest will be reported as it covers the remaining period, and the bills payable will be reported as a liability.

On 1 December 2015 Morgan Smith Ltd Issued a Three-Month,$50