At its December 31, 2014 year end, Jamison Company recorded $200 interest payable on a $10,000, 3 month, 5% note payable. The company's financial statements will present notes payable of $10,200.

Question

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The $200 interest payable would be recorded as a separate liability (Interest Payable) rather than being added to the Notes Payable balance. Notes Payable would remain at $10,000.

At Its December 31, 2014 Year End, Jamison Company Recorded