Capeside Corporation began 2010 owing notes payable of $3.9 million. During 2010 Capeside borrowed $2.3 million on notes payable and paid off $2.0 million of notes payable from prior years. Interest expense for the year was $1.8 million, including $0.1 million of interest payable accrued at December 31, 2010.
Show what Capeside should report for these facts on the following financial statements:
1. Income statement
a. Interest expense
2. Balance sheet
a. Notes payable
b. Interest payable