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

Question

Quizplus · Accepted Answer

Accrued interest payable for notes payable issued in one period and due in the next should be recorded at the end of the period in which the note was issued, not at the beginning of the next period. This is to recognize the interest expense incurred during the period, even though the payment will not be made until the next period.

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