Chapter 4
Current Liabilities
160
AS-23 (
6
)
Describe the journal entries that would be made by the borrower during the period of a short-
term note payable.
AS-24 (
6
7
)
Northing Company has an outstanding 10-year, 5%, $1,000,000 note payable, which was
issued on October 31, 2016. Northing must pay $100,000 to the lender on October 31 of each
year, starting in 2017. In addition, it must pay interest to the lender semi-annually on April 30
and October 31 of each year. Describe how the note payable and accrued interest should be
presented on Northing’s financial statements for the year ended December 31, 2016.
