1) Cranberry borrowed $350,000 on October 1, 2017, via a zero-interest bearing note requiring payment $360,000 on March 1, 2018. How much interest expense will Cranberry recognize from October 1 to December 31, 2017?

a) $10,000

b) $6,000

c) $0

d) $4,000

2) On December 31, 2017, Red Co. had a $500,000 note payable due February 1, 2018. On January 10, 2018,n Red completed a contract to refinance the note payable which extended the due date to June 1, 2020. How should the $500,000 note payable be classified on Red's December 31, 2017 balance sheet?

a) as a current liability.

b) as a long-term liability.

c) as a temporary liability.

d) as an intangible liability.

Please answer both need for an exam!