1. What is the difference between classification of a note as short term or long term? 2. At the beginning of year 1. B Co. has a note payable of $72,000 that calls for an annual payment of $16,246, which includes both principal and interest. If the interest rate is 8 percent, what is the amount of interest expense in year 1 and in year 2? What is the balance of the note at the end of year 2