Notes payable usually require the borrower to accrue interest expense and interest payable at the end of the accounting period.

Question

Quizplus · Accepted Answer

Notes payable typically carry an interest rate, and the borrower is required to accrue interest expense and record interest payable at the end of each accounting period until the notes are paid in full. This is necessary to accurately reflect the cost of borrowing and the amount of interest owed to the lender.

Notes Payable Usually Require the Borrower to Accrue Interest Expense