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

Question

Quizplus · Accepted Answer

This is because the accrued interest represents the interest expense that has been incurred but not yet paid, and needs to be recorded as a liability on the balance sheet. The interest accrues over the period that the note is outstanding, and therefore needs to be recorded at the end of each period until the note is paid off.

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