Chapter 3, Problem 3.2S

LO 1

(Learning Objective 1: Explain how accrual accounting differs from cash-basis accounting) Portage Corporation began 2018 owing notes payable cf $4.0 million. During 2018. Portage borrowed $1.9 million on notes payable and pale off $1.7 million of notes payable from prior years Interest expense for the year was $1.1 million, including $0.2 million of interest payable accrued at December 31, 2018.

Show what Portage should report for these facts on the following financial statement

1. 1. Income statement for 2018
   1. a. interest expense
2. 2. Balance sheet as of December 31. 2018
   1. a. Notes payable
   2. b. Interest payable