1. A pending court case with a probable unfavorable outcome is an example of a contingent liability which should be disclosed on the balance sheet and does require footnote disclosure. (True/False)

2. On May 1, 2021, Carolina Company issued a note payable to Fidelity Bank in the amount of $8,200,000, bearing interest at 10%, and payable in four equal annual principal payments of $2,050,000. The first payment for interest and principal was made on May 1, 2022. At December 31, 2022, Carolina should record accrued interest payable of?

3. A note payable always bears interest and can be either short-term or long-term. (True/False)