Short-Term Notes Payable (2 of 5) In addition to recording the note payable, the business must also pay interest expense. On October 1, a business purchased inventory for $8,000 by issuing a 6-month, 10% note payable. 1. 2. The fiscal year ends on December 31. Do the following three entries: The entry for when you issue the note payable get the inventory The entry for your interest expense at fiscal yar end The entry for when you pay the note payable 3