On August 1, 2020, a company borrowed cash and signed a one-year interest-bearing note on which both the face value and interest are payable on August 1, 2021. How will the note payable and the related interest be classified in the December 31, 2020, balance sheet?

Note Payable Interest Payable
1. Noncurrent liability Current liability
2. Current liability Current liability
3. Noncurrent liability Not shown
4. Current liability Noncurrent liability

Current Liability are those liability that are to be repaid within a short period of time, usually within a year. Example Accounts Payable.

Non Current Liability is that liability that is to be repaid in a long period of time, example Bonds Payable.

Notes Payable will be paid on 1 Aug 2021, which is 7 months after 31 Dec 2020 (within a year) and hence will be classified as Current Liability.

Interest Payable is also a current liability.

Correct Option #2

Notes Payable – Current Liability

Interest Payable – Current Liability

Explanation:

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi

fractionally backed paper money

fiat money

paper money

metallic money