Chapter 10, Problem 2Q

To determine

Notes payable:

Notes Payable is a written promise to pay a certain amount on a future date with certain percentage of interest. Companies are issuing notes payable to meet short-term financing needs.

Interest expense:

Interest expense: Interest expense is the amount of interest paid on the issue price of the notes by the issuer at stated dates at stated rate of interest.

Interest payable:

Interest payable: Interest payable is an accrued expense. So interest payable is coming under the category of current liabilities.

To ascertain: The information that be reported for the notes payable in the annual financial statements of the “P” Company.