On July 1, 2012, Williams Company borrows $80,000 from the bank by signing an $80,000, 8%, 2-year note payable. Annual interest is paid on June 30. Williams has a December 31 year-end.
a. Prepare the journal entries to record the issuance of the note and accrued interest at December 31, 2012.
b. How would Williams report the note payable on its 2012 and 2013 balance sheets?