For notes payable issued in one period and due in the next period,accrued interest payable must be recorded at the end of the first period.

Question

Quizplus · Accepted Answer

This is because the interest has accrued (accumulated) during the first period, but it is not due until the next period. Therefore, the company must record the interest as a liability (accrued interest payable) at the end of the first period, so that it can be paid when due in the next period.

For Notes Payable Issued in One Period and Due in the Next