DR Notes Payable 150,000; DR Interest Payable 1,500; CR Cash 151,500
Interest Payable = ($150,000 x .04) x 3 / 12 = $1,500.
<h3>What is Interest Payable?</h3>
Interest Payable is a liability account, shown on a company's balance sheet, which represents the amount of interest expense that has accrued to date but has not been paid as of the date on the balance sheet.
In short, it represents the amount of interest currently owed to lenders.
<h3>Is interest payable an asset?</h3>
Interest payable is a liability, and is usually found within the current liabilities section of the balance sheet.
Learn more about interest payable here:
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