1. 2. 3. 4a. Maturity date = November 1 + 90 days = January 30. Principal.......... x Interest rate x Fraction of year (Nov. 1 - Dec. 31).... Total interest in current year.. Principal............ x Interest rate....... x Fraction of year (Jan. 1 - Jan. 30)..... Total interest in the following year...... Nov. 1 Cash............ 4b. Dec. 31 Notes Payable........... Borrowed cash by issuing an interest-bearing note. Interest Expense.......... Interest Payable............. Accrued interest on note payable. 4c. Jan. 30 Interest Expense........ Interest Payable......... Notes Payable.......... Cash......... Repaid note plus interest