On August 1, 2014, a company borrowed cash and signed a one-year interest-bearing note on which both the face value and interest are payable on August 1, 2015. How will the note payable and the related interest be classified in the December 31, 2014, balance sheet? Note Payable Interest Payable

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The note payable is a current liability because it is due within one year. The interest payable is also a current liability as it has accrued by December 31, 2014, and is due within the next year.

On August 1, 2014, a Company Borrowed Cash and Signed